I feel comfortable in saying that just about any time you can line up a bunch of analysts and they are ALL repeating the same theme or “logic”, INEVITABLY, they are going to be wrong…which IS, as I wrote last Friday, precisely the current case with the Republican’s failure to repeal Obamacare…As I then noted, this “event” has become the latest “reason” for the herds of know-nothing brokerage house and internet analyst to proclaim once again, “Don’t buy it here!”
Check out a sampling of headlines and opinions from the last few days…and I would emphasize that all these headlines or quotations come from different individual sources…in other words, a whole herd of “professional” SHEEP…
Really…Do you suppose that ALL of those nitwits, ALL mouthing virtually identical opinions…are going to be right? Is that how the markets work? Not that I’ve ever seen in my 36 years of doing this…Those guys were almost unanimously bearish in 2016…and when you get down to it, STILL are.
Again, I still think the stock market rally is FAR from over…AND that the market IS signaling that we are soon going to be seeing some stunningly strong economic numbers…all of which are going to blow the idea of slowly rising interest rates out of the water…Therefore, with the interest rate markets STILL only reflecting a 1/4% increase between now and September…SIX months away…I CONTINUE TO LOUDLY RECOMMEND BUYING PUTS IN THE SEPTEMBER EURODOLLAR CONTRACT.
And I will remind you that just because some Fed governors are talking about gradually (slowly) rising rates does NOT mean that is how this whole thing will play out…And I would also remind you that 4 months ago, NO ONE, including anyone at the Fed, had ANY idea or expectation of now seeing the NASDAQ at 5400 or the Dow at 21,000…the point being, THEY DIDN’T SEE THE STOCK MARKET RALLY COMING…AT ALL…JUST AS THEY NOW DON’T SEE INTEREST RATES RISING ANYWHERE NEAR AS FAST AS I THINK WILL BE THE CASE.
And one more time, when rates are going up…Eurodollars go lower…
I am human. The fact that we have been sideways since mid December is frustrating…but it does not change, AT ALL, my very firm conviction that this market is imminently (literally) ready to make a relatively straight down move to, at least, the 98.00 area…I have been preaching, “any day now” for a while…and I continue to do so…Having watched this 98.50 put get cut almost in half in the recent week…while the market rallied a miniscule 9-10 ticks…only solidifies my belief that “nobody” wants the puts that I am buying…and I LIKE THAT.
I repeat…I think you buy these puts now…while they are just so dirt, dirt cheap…Maybe I’m totally wrong, but I still see this as more leverage than I have ever seen in this business.
Nothing is infallible, but I LONG ago learned that when it comes to trading, the best time to act…is when no one else wants to.
Pick up the phone if you are interested…
All option prices in this newsletter include all fees and commissions.
The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Eurodollars