What The Year Of 2019 Is Sure To Bring
2018 is now in the books. On Monday the price action will probably be light. All of the major players are on their yachts in St. Kitt or enjoying skiing in the Alps and/or in the Rockies. It is the first year since 2008 that will show a loss in equities. However, the US markets outperformed the rest of the world. President Trump blames the recent collapse on the FED and he could be right, but I believe that after a nine year bull the sellers are now the strong hands. Mr. Trump took the credit for the bull but is now blaming the FED for the downturn and that doesn’t sit well with me.
I think that 2019 will be a very volatile world and that is what we like. Each New Year Eve I make the same predictions for the following year. I am always 100% correct. I wish I could do that with the markets. I do to not claim to be a psychic, that business is a scam. However, I do claim to be a statistician and therefore my outlandish predictions will come true. Here is what I am predicting for 2019.
I predict that over 1,000,000 people will die this year worldwide riding in a car. That is correct. Every two seconds someone dies in a car crash. While I have been writing this article more than 100 people have died in car crashes. The most dangerous thing in the world is not to be in a war zone but in fact, it is riding in a car.
I predict that more than 60,000 people will die of snake bites.
I predict more than 10,000 people will die of scorpion bites.
I predict more than 5,000 people will die from spider bites.
I predict that more than 2000 Earthquakes will hit the U.S. but less than 50 people will die.
I predict that there will be more than 100 commercial airline accidents worldwide but less than 1000 will die.
I predict that the Stock Market, as measured by the DJIA will have at least 85 up days and 85 down days.
I predict that every team in Major League Baseball will win at least 55 games and lose at least 55 games, so why don’t they just play 52 instead of 162?
I predict that there will be more than 50 hurricanes and typhoons worldwide and a least 1000 people will die.
I predict that there will be less than five deaths from shark attacks in the U.S, but the internet will make it seem like it is almost a certainty that if you go in the water by yourself a shark will get you!!!
How can I predict these numbers with confidence? They are simply statistical probabilities that are 100% accurate each year. I wish everything in life was this clear cut!!!
Happy New Year
Ask Mr. Seifert
I am constantly asked questions about trading and how to exploit certain market factors to insure success. Each week I will answer one of those questions with a short paragraph which will cover the trading subject.
Question: My broker says to buy debit spreads they have less risk than a credit spread. Is he right?
Answer: Your broker is referring to the fact that a debit spread will always have less premium risk than the credit spread, but that doesn’t mean that it has less risk. In fact, it has more risk than a credit spread at the same strike price. Here is why. For the debit spread to be profitable it must overcome the premium you paid for it plus it must move in the price direction that you predicted when you bought it. Even if you are correct in predicting price movement it may not move enough to overcome the debit. On the other hand, a credit spread can win three ways. The price moves in the direction that you predicted, the price doesn’t move at all, or the price moves against you but not as much as the credit you sold. For my money, I would rather have three ways to win and take the larger premium risk. In the long run you can’t beat a credit spread.
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 look at how the equity markets are faring.
Possible Blow Off (Bearish)
Our computer model turned negative on the equity market at the end of September 2018 (DJIA – 26458). Although the market continued to rally for a few days, we continued to advise against taking any new long positions. We thought it was much better to trade from a safe posture. When the neckline of a head and shoulder chart pattern for the DJIA was violated in early December (DJIA – 24432). we felt that there would be more pain in the market. As it turned out we were right. This past week has been the most volatile for equities in past ten years as the DJIA has traded down to the 21800 area. Is this the bottom? We think that last week’s price action has signaled a capitulation price bottom. While 1000 point drops and 1000 point rallies at these levels do capture headlines, on a percentage basis we have seen this price action hundreds of times before. Remember the markets never announce themselves. If they did everyone would be there to take advantage of the price action. While Market Edge (www.marketedge.com) remains bearish at this juncture, you should only play this market from the long side. If you want to sit on the sidelines and wait for things to settle down, that is your option, but under no circumstance should you get short at these levels. Oh by the way, the guys over at Market Edge think that their market timing computer system is going to reverse course very soon.
Get Your FREE Two-Week Trial Subscription
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 less than $500 (the spread differential minus the credit spread) 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 21st Century Covered Calls Strategy: A modern day alternative to the old fashioned covered call strategy.
- The Low Cost Put – Call Hedge Strategy: Sleep at night knowing your portfolio is protected for little or no cost.
- The Bullish – Bearish Credit Spread Trade: The basic strategy of trading weekly credit spreads.
- 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