Author Archive

Taxes And Earnings

Has the new Tax law had an affect on S&P 500 earnings?  Well, yes, just a little:

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Hat tip LPL Research/Ryan Detrick

Good Wood

Who’d a thunk it.  Over the last two years Global Timber and Forestry stocks are up over 83% and at new all-time highs this week:

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Hat tip Charlie Bilello

 

Update on XOP Options Trade

With today’s surge in oil prices, I unwound the XOP call options trade that I wrote about last week. The exact details:

Sold the May 35-38 call vertical for $1.40 with XOP trading at $35.95 for a $.50 cent gain on my $.90 risk position or +55% in one week.

I left a tiny bit of money on the table so far today, and given the unexpected strength in oil prices once it cleared the $65 per barrel resistance zone, it would not surprise me to see this spread gain even more in value.

However, my target when entering the trade was that $65 oil price level, so I stuck to my trade plan. Few things I have learned over the past few months of trading the energy sector:

1) Energy stocks have lagged the upward move in oil prices going back to the fall of 2017, and today was one of the few days I recall where the stocks kept pace or even out performed the underlying commodity on the upside. There have been way too many days when they under performed in both directions.

2)Many people (investors/traders) can’t/won’t/or are not permitted to trade oil futures. Therefore on days where oil equities act as surrogates for oil futures, I have found it best to follow the old proverb: “Feed the birds when they are chirping”.

3)Lastly, as a trader I need to constantly remind myself of another old proverb: “I am in the moving business, not the storage business”, so a 55% return in a short period fits that description. Decided to ring the profit bell.

Bears Are Pretty Rare

And there not the end of the world…

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Hat tip StockTwits/Callum Thomas

Under The Surface

No question, last week’s jobs report was a disappointment.  But, below the headlines wages showed a sharp improvement:

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The increase in wages on a 3-month basis was the highest in years.

Hat tip Jesse Felder

Lightening Rising

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From Strategypage.com  Capt. Andrew “Dojo” Olson performs aerial maneuvers flying the F-35A Lightning II during the Wings Over South Texas air show at Naval Air Station Kingsville, Texas, March 24, 2018. The F-35 is the world’s most technologically advanced fifth-generation fighter aircraft. (U.S. Air Force photo by Airman 1st Class Alexander Cook)

Just How Wild Was Last Week?

Last week was extremely volatile.  Ryan Detrick puts the wild action in perspective:

The S&P 500 dropped 2% on both Monday and Friday, but was up the other three days of the week.

Last time that happened was October 1937.

Hat tip LPL Research

An Ominous Sign?

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The grey areas above mark recessions.  Interesting…

Quote of the Day

“Everyone understands the things that happen within two standard deviations, but everything important in financial history takes place outside of two standard devisations.” – R. Kayne

Hat tip Jim O’Shaughnessy

Tim Tebow Talks Life

Extremely special stuff.  We could use a few more Tim Tebow type role models.

Enjoy: 

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Welcome fellow traders and investors!

As Money Managers and Traders, the mission of our Blog and Radio Show is to go on record and further educate our readers and listeners in technical analysis and proper money management across all asset classes.

Our methods are not the traditional advice you hear repeated and repackaged over and over again, but that’s exactly the point and the reason why we know how to advance and prosper in every kind of market.

To Your Success,

Doug & Gary