The New Washington Circus: The Census!
Here we go again with a new circus in Washington. We couldn’t wait for the Mueller report to unfurl on July 17th and now we need something better. How about the census report of 2020? Census reports have been taking place since Roman times and according to Webster’s definition it is a “complete enumeration of a population”. In other words, how many people live in a country. Here is where the real fun begins.
The supreme court ruled in a 5-4 decision in which Justice Roberts led the liberal vote that the census should not include a line in which the takers were required to state whether they are an American citizen. Even though they could be an illegal alien they would count as a member of the population of the United States. So, no matter how you entered the country as either a citizen or crossed the border illegally you would count.
So why is this such a fight over the line that states whether you are a citizen, or you are here illegally? It is the same old fight and it has nothing to do with an accurate count of the demographics of the U.S. It has to do with the political implications. The liberals, who now are calling themselves what they really are – socialist, want every single person counted as it will allow them to gain votes and redistrict the way that the house of representatives will have seats voted on.
The Republicans don’t want this to happen. Their position is that if you are not a U.S. citizen then the “complete enumeration of the population’ should be limited to only U.S. citizens. They don’t want he Democrats to be able to use the census to “gerrymander” districts based on who is a citizen and who is not. As usual, there will be a lot of lawsuits flying, claims on both sides of the isle that the other side is to blame and in six weeks it will all be forgotten.
And what ever happened to one of the most famous women in the world, Christine Blasely Ford?
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.
Is it possible to sell a credit spread that can have less risk than reward?
Answer: Yes, it is possible to sell a credit spread that has less risk than reward. The trade is called a 60/40 and it is an aggressive directional spread. Here is how it works. Normally when we sell a credit spread, we sell the ATM strike and buy a strike that is further out of the money. If you use a 60/40 we sell a spread that is slightly in the money. We are not taking a neutral position we are trying to predict the direction that the underlying stock will move. So instead of selling a $500 widespread for $220 and assuming a $280 risk we sell the spread for $280 and assume a $220 risk. We never risk more than the difference between the strikes minus the premium we collected on the spread. The difference is in the 60/40 spread, if the price doesn’t move in our favor, we will not collect the entire $280. We will only collect a portion of the spread as a profit. The 60/40 is a spread that many professional traders use when they are confident that the price will move in their favor.
The Wise Guy Report: The View From The Floor
Each week I talk about what I think the Wise Guys (floor traders) are up to with the Big Three commodity contracts: Gold (GC), Crude Oil (CL) and Long-Term Interest Rates (ZB). I also track the Market Edge (www.marketedge.com) ‘Market Posture’ which has a twenty-six year record of forecasting the intermediate-term direction of the stock market as measure by the DJIA with around 70% accuracy.
T-Notes
It was another week of congestion as the market waited for the jobs report. When it came in positive the market changed its position on whether rates will be cut in July. Truthfully it doesn’t seem that there is a reason for a cut as we have little room to the downside and the selloff on Friday reflected that. We are now at near term support which if we violate it, I will take profit and look for a new entry point.
Crude Oil
After a week or upside action, crude decided it was time to take a breather. Even with the problems in the strait of Hormoz and the Iranians claiming that one of their tankers was stolen as part of the economic sanctions, the market sold off in mid-week. It did have a rally on Friday but that was not enough to overcome the selloff on Wednesday. I am still long Crude but if it violates near term support, I will take profit and look for a new opportunity.
Gold
Is now in a volatile congestion phase at the top of the current market. It traded down on Friday to near term support. This could be a volatile congestion area that will find a breakout in a large range. I am looking to see the breakout occur before I am going to initiate a new position.
| The Big Three Commodities Contracts
|
||||||||||||||||||||||||||||||||||||||||
The Market Edge ‘Market Posture’, which has been Bullish since the week ending 04/18/2019 (DJIA 26559.54) remains Bullish at this time.
| Market Timing Models | Current Reading | Prior Week | Connotation | ||||
| Cyclical Trend Index (CTI): | 2 | 2 | Positive | ||||
| Momentum Index: | 5 | 5 | Positive | ||||
| Sentiment Index: | -2 | 0 | Negative | ||||
| Strength Index – DJIA (DIA): | 46.7 | 70.0 | Negative | ||||
| Strength Index – NASDAQ 100 (QQQ): | 64.7 | 61.8 | Positive | ||||
| Strength Index – S&P 100 (OEX): | 48.5 | 54.6 | Negative | ||||
The Optionomics Scoreboard – YTD Traders Results
| Week Ending: | 07/06/19 | |||||||||||||
| Risk Capital: | $20,000 | |||||||||||||
| Performance For Week Ending: | 07/06/19 | |||||||||||||
| $ Win For Week: | $665 |
|
||||||||||||
| $ Loss For Week: | $0 | |||||||||||||
| $ Total Profit/Loss For Week: | $665 | |||||||||||||
| % Total Profit/Loss For Week: | 3.3% |
|
||||||||||||
| Win % For Week: | 100.0% | |||||||||||||
| Average # Trades Per Week: | 5 | |||||||||||||
| Performance Since Week Ending: | 01/04/19 | |||||||||||||
| YTD Number Of Trades: | 123 | |||||||||||||
| YTD Number Of Weeks: | 26 | |||||||||||||
| YTD S&P 500 % Gain/Loss: | 18.3% | |||||||||||||
| YTD Optionomics $ Gain/Loss: | $4,288 | |||||||||||||
| YTD Optionomics % Gain/Loss: | 23.5% | |||||||||||||
| YTD Annualized % Gain/Loss: | 47.1% | |||||||||||||
| Win % YTD: | 63.0% | |||||||||||||
| Largest Dollar Draw Down | ||||||||||||||
| 05/03/19 to 06/21/19:—————–> | $3,287 | |||||||||||||
| Bullish Trades | Bearish Trades | |||||||||||||
| Blow Off Bottoms-Bullish Trades | Blow Off Tops-Bearish Trades | # Of | ||||||||||||
| Stock | Profit | Loss | Stock | Profit | Loss | Trades | ||||||||
| CVX** | $213 | 60 | ||||||||||||
| MA** | $414 | |||||||||||||
| DE | $14 | |||||||||||||
| One-Day Wonder-Bullish Trades | One-Day Wonder-Bearish Trades | # Of | ||||||||||||
| Stock | Profit | Loss | Stock | Profit | Loss | Trades | ||||||||
| JPM | $24 | 24 | ||||||||||||
| Bullish Verticle Put Credit Spreads | Bearish Verticle Call Credit Spreads | # Of | ||||||||||||
| Stock | Profit | Loss | Stock | Profit | Loss | Trades | ||||||||
| 31 | ||||||||||||||
| Bullish-Earnings Trades | Bearish-Earnings Trades | # Of | ||||||||||||
| Stock | Profit | Loss | Stock | Profit | Loss | Trades | ||||||||
| NONE | NONE | 11 | ||||||||||||
| The SPY Short Term Bullish Power Plays | The SPY Short Term Bearish Power Plays | # Of | ||||||||||||
| Stock | Profit | Loss | Stock | Profit | Loss | Trades | ||||||||
| NONE | NONE | 2 | ||||||||||||
| Transaction Fees & Dividends Not Included In Results. | ||||||||||||||
| * After Symbol Denotes 100% Profit Instead Of Friday’s Closing Price. | ||||||||||||||
FREE Two-Week Trial Subscription
The option Trades and Strategies offered by the Optionomics Group are unique in that they all have limited risk while creating great leverage. Our basic Bullish – Bearish Credit Spread Trade lets you control 100 shares of a $200 stock, a $20,000 position for less than $500 or 40:1 leverage. Your maximum risk is always limited and our strategies produce winning trades in three out of four possible outcomes. Check out The Scoreboard on the home page to see our results.
Optionomics let you become the casino whereby you have a mathematical edge that enables you to grind out consistent returns. These strategies are designed to produce good returns over short to intermediate-term time frames in any type of market environment.
Optionomics offers a FREE Two-Week trial to its entire web site with no cost or strings attached. Each of the strategies are explained in a 5-7 page booklet which includes detailed explanations and sample recommendations. You can see how the strategies are performing every week by clicking on The Scoreboard tab on the Home page. During the 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 the trail. As a special offer, you can download a FREE copy of my latest book, “Trading Options My Way”. I doubt that you have ever read anything like this.
The ‘Traders’ Subscription Includes The Following:
- The Bullish – Bearish Credit Spread Trade: A basic strategy to trading weekly credit spreads.
- The One Day Wonder Trade: A one day trade with great consistency and upside potential.
- The Blow Off Top – Bottom Trade: A lot of action and big moves too.
- The Earnings Season Trade: Potential big movers with little or no downside risk.
The ‘Investors’ Subscription Includes The Following:
- The 21st Century Covered Call 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 Billionaire Risk Reverse Strategy: Big time leverage – small time risk.
Each Monday morning by 11:00 EST, the recommendations for each strategy are posted on the Optionomics’ web site. In addition, the updated results from the previous week are posted on the Optionomics’ Scoreboard. I also have a webinar on Thursday afternoon where I discuss various option strategies, what is happening on the trading floors 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 either the Traders or the Investor plans at an introductory special of only $39.95 each per month on a month to month basis with no contract or strings attached. That’s $10.00 off the regular subscription rate ($49.95). If you subscribe to both it is only $64.95 per month. I think you will agree that this is a super offer so give it a try. Go to www.optionomicsgroup.com and get started today doing what the pros do –
“Don’t Buy Them – Sell Them”.
Mr. Seifert