SPXL - Go long, fears overblown.

6 ביולי 2018

Trade wars fears, inflation, flat yield curve, slower global growth, the Fed hawkishness, etc. are all overblown.

Here's the facts:

"From 1933 to 2016, the average return for the S&P 500 Index when Republicans held the presidency, House and Senate for the one year after midterms was 15.1%. When Democrats have been in complete control, the increase averaged 9.3%."

Many analysts (including myself) believe that Trump is going to scale back tariff talks before mid-terms in November. This will allow markets to reach new highs. Despite what I hear from many analyst here, it's Trump keeping this market from hitting new highs, and it will be his policy stance that will allow us to break through this consolidation period.

Don't get me wrong, the Fed, inflation, the yield curve, etc. will be concerns, just not much in 2018 (likely 2019 as well).

Proprietary models that I follow suggest that S&P 500 will reach ATHs this year - see red line.

SPXL or UPRO (3x leveraged index funds) are one of the best ways to play this rally.

I'd be a buyer on dips.

Cheers!

10 ביולי 2018

הערה

As you can see, we've approached the high end of the range as expected. Per the red line path, we will likely experience a short-term pull-back next week or so.

One way I like to hedge is to go long UVXY call options or buy QQQ puts (I will likely do the latter as I see tech pulling back the most).

11 ביולי 2018

הערה

Yesterday afternoon, I decided to go long QQQ 8/17/2018 Puts.

Currently up 16.85%.

If we see a strong mid-day reversal, I'll likely close this position for a small gain. Right now it appears that I will be in this trade into next week. Will keep everyone updated.

11 ביולי 2018

הערה

Forgot to mention that I'm long the $175 Puts.

3 באוג׳ 2018

עסקה פעילה

The S&P 500 is just about ~1.5% away from its January high. Given recent price action, I added the blue line as 1 of 2 scenarios that are likely to happen as we move into the back half of the year.

As you can see, I'm very bullish on the overall outlook. I think next week will be decisive on which path (red or blue) we will take. The fundamental backdrop of the US economy is solid on almost every metric. AAPL hitting the 1T market cap is just one sign of that (AMZN likely to be #2). The only thing standing in the market's way is Trump's trade-related threats (that's all they are, really).

Interestingly, just like we saw this week, the market is becoming more immune to these threats "tweet" and not selling off as sharply as it did in the past. This is a very bullish indicator. The markets are focusing on the basics - company's earnings and guidance (which have been strong in Q2-18).

Now just imagine if we get one headline that says: "Trump and China working on a deal." Of course one expects this to end overnight, but any positive headline is likely going to allow this market to continue enjoying all the positive catalyst. We are just one Trump tweet away from S&P 500 hitting an ATH (sad, but true).

Overall, yes, Trump and trade war talk could be the "Black Swan" event that causes the economy and stock market to crash. But with mid-terms coming up in November, I think Trump wants a healthy economy and thriving stock market.

The current bull market started after the financial crisis bottoming on March 9, 2009. On August 23, 2018, it will be the longest bull run in the stock market history.

Action: I am buying every dip related to "trade wars" or if weakness presents itself. This may be the last run-up to take advantage of before we move into more challenging period looking out to mid-2019/2020. There's close to a 90% chance of a recession in the next 2-3 years. So, I'm (like you) taking advance of this golden opportunity and load up on US equities.

Discloser: My main "core" positions right now are: MSFT/AAPL/INTC/PYPL/BAC/JPM/BABA/JD (I still have my QQQ puts open as a hedge).

I also opened up a position in UVXY (volatility) to hedge my long portfolio: Long the 9/21/18 $7 Calls.

I'll provide periodic updates.

Cheers!

13 באוג׳ 2018

הערה

The sell-off that began Friday is likely to continue short-term. This is in line with my original thesis above and is the path the S&P 500 will likely take into year-end.

On 8/3 (above), seeing the markets approach the ATH, I mentioned: "I also opened up a position in UVXY (volatility) to hedge my long portfolio: Long the 9/21/18 $7 Calls. "

While this position was down all last week, all I needed was 1-2 days like we just had for this position to work in my favor. UVXY went up 8.92% today on this latest Turkey news (I don't see this having a lasting impact overall). My option contract is now up ~22%. This is why I always say that it's always prudent to hedge a long portfolio.

One more note is that despite this decline, there are a number of stocks bucking the trend (i.e see TWTR/SQ/AMD). Days like this let you know where institutional money is rotating/where they aren't selling. You can find key insights just by observing these kind of trends -- most analysts know that Q3/Q4 earnings should be strong to finish out the year. The big boys are at work playing retail investors, but they will start to accumulate beaten down names soon enough - especially the names I've mentioned so far in "ideas."

Don't panic on these down days, the market is giving you a gift ;-)



Cheers!

15 באוג׳ 2018

הערה

As expected, markets continue to sell-off after approaching the ATH. This is very technically driven, fundamentals are still in-tacked. I think we have more days like this to come throughout August, but I would be adding to positions.

28 באוג׳ 2018

הערה

I think S&P 500 is topping. I suspect that Sep/Oct will bring a healthy correction that is needed to for a longer-term sustain rally towards the end of the year and into 2019.

I'd suggest trimming some of your major winners and picking up some Vix (I used UVXY).

Don't panic when all you hear on CNBC is that "this is it, the end of the 10-year bull run!" It's not. You don't need a finance degree, MBA or CFA to see that the fundamental economic backdrop is favorable for equities (10-year below 3.5% is key).

Updated outlook over the next 4-8 weeks: tradingview.com/chart/nImdw4p4/

29 באוג׳ 2018

הערה

So far if you've been following along my trades, you've been making a very nice return - outperforming the majority of money managers out there (I know the data due to my work), congrats to you all! More upside to come.

I always like sharing multiple data points, news, and analysis. This technical set up in similar to my view long-term (see below). All the dips that we will get from now and the end of the year should be bought.

Classic chart pattern points to S&P 3,500: cnbc.com/2018/08/29/classic-chart-pattern-points-to-3500-on-the-sp.html

20 בספט׳ 2018

הערה

On July 6, 2018, I said (above):

"Proprietary models that I follow suggest that S&P 500 will reach ATHs this year"

Congrats if you followed this advice/trade (especially if you got into SPXL -- what return!!): this morning Dow and S&P 500 soared to record highs.

Trump Tweeted this morning: "S&P 500 HITS ALL-TIME HIGH Congratulations USA!"

I also said:

"Trade wars fears, inflation, flat yield curve, slower global growth, the Fed hawkishness, etc. are all overblown."

Well just read the headline this morning: "Dow hits record, surpassing January level, as Apple rises and trade-war fears simmer down"
cnbc.com/2018/09/20/wall-street-us-china-trade-spat-takes-a-backseat.html

I think the markets are headed ever higher (with bumps along the way, but no major correction coming) over the next 6-12 months. I also think this will be the last real thrust higher for some time. I will follow up on price levels to watch as S&P 500 approaches $3,000.

Remember, as the market heads higher, don't get afraid and start selling your holding, always hedge with Puts/vol index -- as I mentioned many times above.

More to come, stay tuned -- and congrats again!

Cheers!

26 בספט׳ 2018

הערה

Just pick up SPXL/QQQ Puts. Expecting a short-term pullback until we reach the heart of earnings season. After that, new ATH most like in Dec.

I'll keep everyone updated on my position.

8 באוק׳ 2018

הערה

Love collecting cash on days when the market overacts. Always prudent to hedge.

#ShortQQQ -- 10/26/2018 184.00 Puts (+123%)