All The Presidents Men
Some days it is good to be President of the United States, some days it is bad to have the same job and I am sure that other days you would rather have any other job in the world. Tuesday was that day for President Trump. Mr. Trump has had some great days as the leader of the free world and he is only too glad to tell you about them in fact I get tired of hearing “possibly the greatest thing ever” from him each time something goes his way. Tuesday was not one of those days.
In a matter of hours, two of his closest associates either pleaded guilty or were convicted of felonies that could put them in jail for quite some time. His former personal lawyer, Michael Cohen and Paul Manafort, his one-time campaign manager were the men involved. Mr. Manafort was the chief of Mr. Trumps election effort before friction between the parties ended his involvement with Mr. Trump. His conviction was triggered by his involvement with business deals in Ukraine dating back almost 15 years. Mr. Trump praised his former manager leading some to believe that when the smoke clears from the midterm elections he will end up with a Presidential pardon.
Michael Cohen’s fate looks like it is going to be quite a bit different than Paul Manafort. He “flipped” on the President and told the prosecutor that he had acted at the behalf of Mr. Trump in making payments to two women from campaign funds and not from Mr. Trumps personal funds. To this point Mr. Trump denies that either of the women is telling the truth and that he had nothing to do with them. It hard to believe what the president is saying because all of the evidence seems to indicate that he had more than just a glass of wine with the women.
When you get thru all of the baloney involving what is happening in Washington, nothing has really changed. The Dems are still trying to have the 2016 election results overturned. The extreme left believes that the election was won by Mrs. Clinton when she garnered 3 million votes more than the president and they are not about to let it go. The extreme right wants to crush the Democrats in the midterm and continue to control of the country for the next two years.
As of now Mr. Trump appears to be safe from any flack over what happened this past week, but if the midterm elections turn out to be a surprise and the Democrats upset the wagon, look out. You can be sure that the name Stormy Daniels will come back into the picture and it will not be Mr. Trump recalling times past. It will be a nightmare for the president and could lead to his impeachment on campaign finance charges. As for now he will go back to making America Great Again and put the results of last week out of mind.
Ask Mr. Seifert
I am constantly asked questions about trading and how important execution is to insure success. Each week, we will answer those questions with a short paragraph on a variety of trading subjects.
What is Beta, and how can I use it to help my portfolio?
Answer: Beta is the component of the market that allows investors to compare the volatility of an individual stock to the market in general as measured by the S&P 500. If a stock has a Beta of 1.0 it means that for every 1% that S&P 500 moves up or down, the stock should move the same percentage. In any market environment, understanding the concept of beta is important if you have a diverse portfolio. If the Beta for the stock is 0.8 it means that the stock should move 80% as much as the Index. If the stock has an index of 1.6 it means that the stock should move 1.6% for a 1% move in the underlying index. One thing should be noted. If the market is breaking, Beta will tend to accelerate as volatility increases. As an example, if the Beta of the stock is 1.0 and the market breaks there is a good chance that the stock will break faster than a 1% move in the index.
The Wise Guy Report: The View from The Electronic Floor
Each week I talk about how the Wise Guys (floor traders) find the soft spots in the market and take advantage of price dislocation in three major commodity markets: Gold (GC), Crude Oil (CL) and Long-Term Interest Rates (ZB). On the equity side, I cover MSS which is the Mister Seifert Sez Composite Index. This is a proprietary index that I created which measures the dollar flow of the four major indexes (S&P 500, Nasdaq 100, Russell 2000 and the Dow Jones Industrials) on an unweighted basis. Let’s take look at last’s week price action in the Gold market.
Gold Rebounds From Lows (Possible Blow Off Bottom)
Last week Gold reached a yearly low, down more than 14% since January. Gold has been moving lower for about five months and it looks like it caught a possible bottom the first week of July. That bottom held, and a small congestion pattern formed until the middle of August. It appeared that the bears were losing control of the market, but as it turned out they were able to push it out of congestion one last time. Last week we felt that the low may have been reached Thursday on a capitulation bottom. We stated on Friday’s Optionomics webinar that we thought a buy would be a good move and the only thing you should not do is to sell the market at that level. As it turned out, the buy was the correct play as Gold has now rallied 4% off the bottom and appears to have found traction. The next couple of weeks should tell us the story of where Gold will end up in the final quarter of trading this year.
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The option trades and strategies offered by The Optionomics Group are very unique in that they all have limited risk while creating great leverage. Our basic BL – BR Credit Spread Strategy (and all of the others) let you control 100 shares of a $200 stock ($200*100 = $20,000) for only $500 (the spread differential) or 40:1 leverage with your risk limited to only $500. Plus our strategies produce winning transactions in four out of five possible outcomes.
The Optionomics strategies let you become the casino whereby you have a mathematical edge that lets you grind out consistent returns in any kind of market environment. These strategies are designed to produce good returns over a short to intermediate term time frame. It is an approach to the stock market which will be hot, cold or average over time, but the end result should be very good in any type of market environment.
I offer a FREE Two-Week trial to the various subscription services with no cost or strings attached. Each strategy is explained in a 5-7 page booklet which includes sample recommendations and model portfolios. I doubt that you have ever seen anything like this. During your FREE trial, you can paper trade the various strategies and get a feel for the deal without risking a penny. Simply click on the appropriate tab on the Optionomics’ Home page to access the informative booklets and then sign up for one or all of the weekly subscriptions.
- The Bullish – Bearish Credit Spread Strategy: The basic strategy of trading weekly credit spreads.
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- The Earnings Trade: Get in on potential big movers with little or no downside risk.
- The One Day Wonder Trade: Get ready for some real action. A one day trade with great potential.
- The Blow Off Top – Bottom Trade: A lot of action and big moves too.
Each Monday morning by 11:00 EST, the plays for the upcoming week plus updated model portfolios for each strategy are posted on the site. The prices in the reports are Monday morning’s opening prices. In addition, I have a webinar on Thursday afternoon where I discuss various option strategies, what is happening on the floor and answer any questions that you may have. Don’t worry if you miss the show. They are archived on the site. Sound Good? Good! You can subscribe to one or more of the subscriptions for only $19.95 each per month on a month to month basis with no contract or strings attached. If you subscribe to three, it is only $49.95 per month while you can subscribe to all six for only $79.95 per month, a 33% discount. I think you will agree that this is a super offer so give it a try. Click on www.optionomicsgroup.com to access the Optionomics Group web site and get started today doing what the pros do –
“Don’t Buy Them – Sell Them”.
Mr. Seifert