In recent weeks, we’ve been a slave to the tweets. Namely, two weeks ago for the FOMC meeting that had little reaction and then a 50 point move appeared after, you guessed it: Trump tweeting. And so a wave of confusion persists. Personally, I’m reminding myself that if cash is my position, then I’m naturally safe. But I still have to grow my account, so am I better off with defined risk trades? Is the bullish market over and when can I start buying those puts that I “oh so long for”?
Look, the bulls have built golden castles in the sand for a while now, but what do I make of the markets on the sharp pullbacks (namely last December and once this Spring). Here’s the deal, if we keep heading above a 3,000 S&P then I’ll be the first to admit, the bulls are out and this show ain’t over. And I hate to say it, but in an election cycle (and if we re-elect) 3,000 might be a small number in 2025. That means that every time your bearish on major bullish momentum, you might as well announce to everyone “Hey, I’m about to get my face ripped off here!” We don’t want that to happen. It’s happened for too long!
Here’s your revolution (or at least my take on it, haha)! As an options trader, implementing verticals that are more likely to be 60% profitable and can be rather safe to play in more volatility is the way I would go. I’m staying away from earnings plays for now. Presently, I have alerts set for a VIX at 12 and even 10, in the event we get there, I want to be pretty aggressive as we have seemed to catapult above 20 or even 25 recently, and hey dummies don’t forget we’re in September!
Folks, 2019 was the story of trillion dollar valuations, this is unsustainable! The FAANG is breaking up! What did I just say? Well, Have you seen NFLX this past month, I called NFLX going under $300 when it was $332 due to internal numbers and data I’ve compiled. What happens to AAPL on some more (but possibly permanent) bad China news? Look, I hate it as much as you do, but this is the market we’re in. American spending power has roughly stayed the same. Optimism is still being served on a silver platter to the baby-boomers, if this weren’t true, you’d be seeing a major pullout, something baby-boomers don’t do.
On a secular perspective, being long gold, silver, and BTC (Bitcoin, y’all – it’s a thing) seems like an exciting play on the market optimism quickly dissipating coming into an election. Semiconductor sales are down in 2019, transports are slowing, and I can barely have optimism in the banks.
So, like I say, volatility can be your friend with the right strategy implementation. I’m also looking at companies disrupting major industries for some great long plays, namely SEDG, FSLR, and BYND. By the way, if you have some extra money to start a business in the northern Texas (Dallas/Ft. Worth) area, a solar servicing company is where my efforts would be. Ok, one Easter egg per blog. Y’all be careful out there, enter; Creedence Clearwater Revival “Run through the Jungle.”