The Builders: Trump, China and the Depot (HD,XLP,XLY,XOM,USO)

When the FBI demanded access to Apple’s encryption technology to unlock the iPhones of the San Bernardino terrorists, we were disturbed.  As far as we were concerned, Apple’s refusal to empower an already intrusive surveillance state was commendable. But others saw it differently.   Donald Trump, for one.   Trump went on the offensive, saying we ought to use ‘common sense’ and give the government what they need to fight the bad guys, to know if there were accomplices, etc. And that would be a great thing – to catch the bad guys. All of them. And lock them up.   But there was something unsavory about Trump’s appeal and his further suggestion that we boycott Apple products until they comply with the government’s dictate. To our minds, there’s something resolutely hollow about a government’s claim that privacy must be sacrificed for the sake of criminal justice.   In our experience, there’s always a larger, unaddressed problem that necessitates the need to pursue this type of ‘justice’. Somewhere, there’s a faulty policy, a bad practice, poorly conceived laws or just plain wrongheadedness that sets us up for intrusions of this sort, that allow, for instance, the state to listen to…

Read More

Staple those Discretionaries! (XLP,XLY)

A broken record.   When I was young, and kids listened to LPs, there was an expression that epitomized someone who droned on repetitively about this or that. We said he sounded like a ‘broken record’.   It wasn’t such a friendly moniker, but for us, it summed things up nicely.   And today, at the risk sounding like the same broken record we mocked in our youth, we feel compelled to repeat the message we’ve been broadcasting for several weeks now.   Again!? Why!?   Well, because we believe that all the ballyhoo currently being trumpeted across the airwaves and over the fibreoptic lines that span the financial world is no more than that – just plain old ballyhoo. And the market crash of biblical proportions that all the fancy-pants fund managers and media talking heads would have us believe is already upon us – isn’t. And what’s more, we believe the opportunity to cash in wildly – indeed, quite possibly the last chance to cash in like Crowbar Jim Dundee did at the Lee Family Laundromat – is today upon us.   The Proof, Willy, Give us the Proof!   Who you calling Willy?   The charts below…

Read More

Santa’s Good to the Elite (XOM)

We set a lot of trades here at Options Trader Elite. Roughly once a week – and sometimes more – we set a trade that’s the envy of the newsletter world, both in terms of its return and its sheer entertainment value. There, there, Rachel… take your Zoloft, my love. As it turns out, we very often set trades with December expiries. Not exactly sure why, but it just happens to work out that way. And so it was with last Friday’s options expiry, that we now have a bevy of initiatives that either closed down, or that we feel it’s now appropriate to take off the table. And so, without further delay, we ask Rudolf to run them down for you now. We start with a trade that was launched May 6th in a letter called Rising Rates Returning wherein we claimed the top was in for bonds, the whole market was about to turn lower and everyone should be out of fixed income product for a good long while. As it turns out, we were wrong. The top of the bond market is going to be a longer, more drawn out affair than we originally anticipated, and so…

Read More

I only Eat what I Kill (GDX, XLY, SPY)

Worked for a short time with a Mergers and Acquisitions guy who labored tirelessly to put together his deals. He was a solo operator who had maybe 60 or 70 different projects on the go at any given time, and if he succeeded in matching buyers and sellers at least once a year he was beside-himself elated. He was a patient man. He was dogged in seeking out new matches, meeting new people, racing across continents to package together all the details and as sure as you’re reading this – failing… again and again. But he also knew that was part of the game. Like every good salesman, the rule of 99 strikeouts for every home run was for him a mantra. It was a numbers game, as all salespeople can tell you. It requires patience, patience and more patience. Every rejection is just another step closer to victory. And money. One morning the old fella sat me down in his office and amid complaints that his wife didn’t understand him (she wanted him to get a ‘real’ job) and his in-laws were tired of lending him cash and his credit cards were all tapped out, and he offered me…

Read More

Short Term Profits on an Oil Bounce (XLY, SPY, XOM, USO)

We have an open trade that requires your attention. And depending on what kind of personality you have, it could go in two entirely different directions. It was a trade we opened in mid-August in a letter called The Outperformance Game. There, we spoke about the lack of excitement in the consumer discretionary sector; a corner of the market that generally fares well when consumers are confident and the economy is humming without worry. At that time it wasn’t the case, but we suspected the situation would change, and the discretionaries, as represented by the Select Sector SPDR Consumer Discretionary ETF (NYSE:XLY), would outperform the S&P 500. The trade consisted of a long XLY CALL purchased with funds garnered from a short SPY CALL ( the SPDR S&P 500 ETF). And what happened?   We bought the XLY December 69 CALLs for $1.33 and sold the SPY December 205 CALLs for $1.44, pocketing a credit of $0.11 per pair traded. And today the XLY’s are trading for $2.30, while the SPY’s are fetching $2.55. Take a look at XLY’s chart – The technicals show a tremendous run-up to new highs posted last Friday (in red), and a sharp decline on…

Read More

A Return to Regimen (XLY, XLP)

Glad that’s behind us. The world awaits a new day, friends – a new era replete with sunshine and stock market profits and nothing else besides. And that’s precisely what it’s going to get. On face. For in the same way that Nero was said to be fiddling while Rome burned, so the modern equivalent here in America is avoiding that corpse on the sidewalk as you banter with your broker about the latest tech IPO. Step over that body, bro!   With a couple of major distractions now out of the way, the world will have to invent some new ones if the stock market’s going to continue its wild ascent. We’re referring, of course, to the mid-term elections, which by all figuring have to be considered a tick in the plus column for the stock market. After all, Republican control of both houses gives many a warm feeling about the future of business and economics in America. The other issue is Ebola, which these last few days have been all but vaccinated by the press. We even found a link that supports the notion that we’re over the hype hump with that dreadful virus. The story can be…

Read More

Reader Discretion is Advised (XLY)

We’re going to return today to one of the themes we highlighted in last week’s letter and attempt to explore it in somewhat greater depth. For those who wish to go back and review our thoughts of May 15th, the letter was called Horrifying Research Reveals Rally-Ready Market. Now onto business. We were exploring the give and take between the consumer discretionary sector and the consumer staples, noting the relative strength of the staples during times of worry and that of the discretionaries when investor confidence prevailed. We produced for you a composite chart of the two using the Select Sector SPDR Consumer Discretionary ETF (NYSE:XLY) and the Select Sector SPDR Consumer Staples ETF (NYSE:XLP) – and wrote about them as follows: The see-saw action between the two leads us to believe that we’re now at a point of extreme worry. If we had to bet, we’d go contrary – long XLY and short XLP in a pair’s trade, with the expectation that the gap will once again widen. Since writing those words, we’ve had a closer look at the charts of both and while our assessment remains the same, we want to add some more color to the picture…

Read More

Powered by WishList Member - Membership Software
GET YOUR FREE SPECIAL REPORT:
"THE SEVEN DEADLY SECRETS OF CHINA"

GET YOUR FREE SPECIAL REPORT:

"THE SEVEN DEADLY SECRETS OF CHINA"

Enter your e-mail address to claim your FREE Special Report “The Seven Deadly Secrets of China”

You have Successfully Subscribed!