Bullish Rally in Trouble?
Analysts have been warning that earnings season could pose a challenge to the bull run and that theory is about to be put to the test this week with some big tech earnings on deck.
Is Wall Street’s Optimism Justified?
I’m worried (for you) that the current rally is getting way ahead of itself so as I sit in for Jeff Wood this week, I want to share key metrics today which can help us prepare for a potential correction (not a resumption of the bear market).
What You Need To Know For The Week Ahead
During the week of July 24, the economic data on the calendar will be overshadowed by the significant attention focused on the FOMC meeting scheduled for Tuesday and Wednesday.
Earnings Are Telling Us To Brace For 3rd Quarter Slowdown
Weak revenue and weaker forecasts now have this earnings season in trouble. What started positively with the banks quickly turned sour with the first round of tech, smaller banks, and a marketing giant (and I’m not talking about Google). It shouldn’t come as a surprise since we’ve been talking about the difficulty companies would face to raise profits in light of low GDP growth and an economy now in deflation. Let’s look at some earnings numbers and the one company that could be forecasting where the economy is heading.
And Just Like That, It’s Gone
It’s one of my favorite movie quotes, but instead of Verbal Kint in The Usual Suspects, I’m talking about the tech rally and positive market sentiment around earnings.
Surprising safe haven delivers 51% annualized ROR
Exchange-traded funds (ETFs) may be solid choices for investors looking to diversify, but no one is accusing them of being exciting. And they certainly aren’t the first thing you think of when selling options for income either.
Companies to Watch for the Second Half of 2023
The Goldilocks scenario keeps playing out in the market, giving the bulls enough to take this market higher. We recently saw bank earnings come in better than anticipated while European inflation data came in cooler than expected, showing that disinflation is occurring globally. The market has already priced in a 96% chance for a 0.25% interest rate hike at the next FOMC meeting on July 25-26. With that, the markets ripped higher ahead of tech earnings, but the question is – can tech keep the party rolling?
Taking Advantage of Options Premium “Crush”
When selling options for income, one important factor to consider is what’s known as theta, or time decay.
Theta is one of the option Greeks, and it measures the rate at which an option will theoretically decline in price as it approaches its expiration date.
Sometimes The Data Lies
As I sit here and look at an inverted yield curve, look at P/E ratios through the roof, and growth projections that can’t support current market prices, I look over at the trade screen and I continue to see day after day, the Russell 2000 ripping higher by 1% and the Dow 30 soaring another 1% in a day.
We Took the Money and Ran With This EV Maker
As income traders, we often go back to the well, so to speak, and trade a roster of stocks that we are very familiar with. That’s because the name of the game is generating consistent income, not finding the next hot, new investment.
