It’s Friday. It’s a three-day weekend. Time for a break.
| | | | | | | | | Hey y’all!
Is anybody else just tired?
Maybe it’s because I stayed up too late last night, then woke up early to drive a dear friend to the airport, but when I think about the markets today, all I can think about is fatigue…
And while I might need about six more cups of coffee, I don’t think it’s just me.
When I take a look at this, I think other people feel it, too…
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| A lot of muted, blah colors on that chart. Tech is doing well, but not well enough to save my QQQ trades.
It makes me think of that Revelation quote: “would that you were either hot or cold. But because you are lukewarm… blech…” (That’s not quite how the quote ends but I think it fits today)
Doesn’t the exhaustion make sense, though?
Nobody really feels confident about the economy right now. Sure, the PCE print was good, which all but confirms price cuts are coming, but price cuts have been priced in for months now.
Nobody really believes that the economy is “healthy,” despite what the Fed might be saying.
I think the vast majority of Americans, despite what you see on Twitter, aren’t really fired up about either Presidential candidate and their visions for the future.
It’s just a very lukewarm time right now.
And when it comes to trading, I think that means you have to be especially careful not to get suckered into narratives.
My personal expectation now is that we’re going to stay relatively flat until the election. I’m not sure what will happen after that, but I don’t think we’re going to see a rally, because I don’t see what could spark one.
Rate cuts won’t do it. They’re already priced in.
NVDA reported mind-boggling earnings numbers this week and the markets went lower.
Everyone seems to be looking for reasons to stay cautious. Not too hot. Not too cold. Lukewarm.
But a sideways market doesn’t mean you have to stay on the sidelines.
There are a lot of smart things you can do.
One thing our experts recommend? What Graham Lindman calls “wrap orders,” or, more technically, At-the-Money Credit Spreads.
Directional credit spreads are especially powerful in sideways markets, because they limit your cost (spreads are generally significantly cheaper to get into than straight calls or puts) and protect you from downside risk (you’ll always know your max loss when entering), but they still give you significant upside potential if you’re right about direction.
And with Graham’s approach, he says “we only typically need a 0.2 to 0.5% move in a week to get 100% ROI so not a lot of direction or upside needed.”
Geof Smith agrees with this approach, and we even got a chime in from a new expert I’m really excited to be welcoming to the ProsperityPub team: Chris Pulver!
Here’s what he had to say:
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| | | | So all of our experts agree: directional credit spreads are a great tool in sideways markets.
But maybe don’t put any on before this weekend. It’s Labor Day. Relax and enjoy yourself.
Then, come back refreshed on Tuesday!
To your Prosperity,
Stephen Ground
P.S.: Speaking of controlled trades targeting huge returns on small moves in the underlying stocks, have you heard about Nate Tucci’s Jump Trades? You should really check out the strategy here. Nate’s Jump Trade setup is actually the first options trade I ever took, so they’re definitely “beginner friendly.” And I’ve loved them ever since! | | | | |
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Hey y’all!
Is anybody else just tired?
Maybe it’s because I stayed up too late last night, then woke up early to drive a dear friend to the airport, but when I think about the markets today, all I can think about is fatigue…
And while I might need about six more cups of coffee, I don’t think it’s just me.
When I take a look at this, I think other people feel it, too…
A lot of muted, blah colors on that chart. Tech is doing well, but not well enough to save my QQQ trades.
It makes me think of that Revelation quote: “would that you were either hot or cold. But because you are lukewarm… blech…” (That’s not quite how the quote ends but I think it fits today)
Doesn’t the exhaustion make sense, though?
Nobody really feels confident about the economy right now. Sure, the PCE print was good, which all but confirms price cuts are coming, but price cuts have been priced in for months now.
Nobody really believes that the economy is “healthy,” despite what the Fed might be saying.
I think the vast majority of Americans, despite what you see on Twitter, aren’t really fired up about either Presidential candidate and their visions for the future.
It’s just a very lukewarm time right now.
And when it comes to trading, I think that means you have to be especially careful not to get suckered into narratives.
My personal expectation now is that we’re going to stay relatively flat until the election. I’m not sure what will happen after that, but I don’t think we’re going to see a rally, because I don’t see what could spark one.
Rate cuts won’t do it. They’re already priced in.
NVDA reported mind-boggling earnings numbers this week and the markets went lower.
Everyone seems to be looking for reasons to stay cautious. Not too hot. Not too cold. Lukewarm.
But a sideways market doesn’t mean you have to stay on the sidelines.
There are a lot of smart things you can do.
One thing our experts recommend? What Graham Lindman calls “wrap orders,” or, more technically, At-the-Money Credit Spreads.
Directional credit spreads are especially powerful in sideways markets, because they limit your cost (spreads are generally significantly cheaper to get into than straight calls or puts) and protect you from downside risk (you’ll always know your max loss when entering), but they still give you significant upside potential if you’re right about direction.
And with Graham’s approach, he says “we only typically need a 0.2 to 0.5% move in a week to get 100% ROI so not a lot of direction or upside needed.”
Geof Smith agrees with this approach, and we even got a chime in from a new expert I’m really excited to be welcoming to the ProsperityPub team: Chris Pulver!
Here’s what he had to say:
 So all of our experts agree: directional credit spreads are a great tool in sideways markets.
But maybe don’t put any on before this weekend. It’s Labor Day. Relax and enjoy yourself.
Then, come back refreshed on Tuesday!
To your Prosperity,
Stephen Ground
P.S.: Speaking of controlled trades targeting huge returns on small moves in the underlying stocks, have you heard about Nate Tucci’s Jump Trades? You should really check out the strategy here. Nate’s Jump Trade setup is actually the first options trade I ever took, so they’re definitely “beginner friendly.” And I’ve loved them ever since! |
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