XBI Option Traders Looking for a Bearish Close to 2020
XBI Unusual Option Activity Report Another Monday and another Vaccine story lifting biotech and ETFs like the SPDR S&P Biotech ETF (NYSEARCA: XBI). Today, it was Moderna Inc (NASDAQ:MRNA) announcing its vaccine was 94.1% effective and was 100% effective at preventing severe forms of COVID-19. Also, the phase 3 clinical study showed no serious safety […]
Risk Ratios: An Early Indication of a Short Squeeze
Risk Ratios Intro Many years ago, I was working on ways to identify market trends using what I called “Risk Ratios.” The idea was to use ratio analysis of major market indices or index ETF products to gauge things like inflation expectations, market valuation, cyclical trends and large-scale short covering. Every Friday, I take time […]
Retail Favorites Like Tesla Win Big
Small Thanksgiving Eve Decline (Tesla Rallies Again!) 70% of the time stocks rise the day before Thanksgiving, but they didn’t on Wednesday. Some investors don’t make anything of this decline. The market is overbought and few speculative stocks are dramatically too high. This decline doesn’t mean the market will regain its sanity. In fact, the […]
Bad Pre-Holiday Economic Data
Early Jobless Claims Because of the Thanksgiving holiday, jobless claims came out a day early, and they were terrible. This is the 2nd week of bad numbers which signals the labor market is getting worse because of COVID-19. This won’t be a double dip recession. But December will be a bad month for the economy. Last […]
TLT Bears See Opportunity in Yellen Treasury Announcement
TLT Unusual Option Activity Report As Joe Biden continues to lay out his cabinet selections, one selection may have bond bears looking at the iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT). The selection of Janet Yellen as Treasury Secretary is one that should be good news for inflationists. The diminutive but not di minimis […]
Makings Of A Stock Market Bubble
This Is A Bubble There is a ton of euphoria in the market. Reopening stocks are on fire and the overall indexes keep hitting records outside of the Nasdaq which is 16 basis points from a record. This isn’t exactly how we expected this to play out as many were bearish on large cap growth […]
How The Consumer Is Doing Headed Into Black Friday
We May See 2% Holiday Shopping Growth The consumer will probably weaken in the next few weeks as the spread of COVID-19 is coming at the worst time for the economy. Some thought the expectation for 3.6% to 5.2% growth was too high. There will be low single digit growth. That will specifically call for […]
It’s A Party For Short Sellers – Great Opportunities Are Here
Is This The Greatest Market For Short Sellers Ever? Yes, this is the greatest market for short sellers ever. To be clear, that doesn’t mean the overall market is going to fall by the most ever. Shorting the overall market is generally a hedge. Short sellers find bad companies that are valued too highly. In […]
NRF Optimistic About Holiday Spending
Consumer Is A Mystery Undoubtedly, this is the hardest holiday shopping season to predict ever. Normally, retail sales are hard to predict, but usually it’s not difficult to get within a couple of percentage points of the result. This current season is an order of magnitude tougher. As a hypothetical, if someone predicted 3.5% growth […]
Options 101: Options Dividend Risk and How to Avoid It
Dividends Meet Options If you’ve made an option trade, you’ve probably seen the disclaimer warning of potential dividend risk. Most probably gloss over that information and never consider how their option trades could be impacted. However, we got flooded with emails last week asking questions about this type of risk, which was a great to […]