Overall State of the Market

It's quiet...too quiet [frep, frep header, header, logo] Capitalize with Bombshells, Aftermaths, Fuse Trades and more heading into this earning season.[See the proof and learn the 4 trading styles and how we pick the perfect price to maximize the profits right here.]( Hey Options Income Players, Hans here. Overall State of the Market Markets have been quiet lately with that GIANT JPM collar position at 5750 on the SPX pinning things down a bit. That probably means we watch the paint dry until about Monday morning. We’ve seen technology enjoy a resurgence as investors have rotated into, well… everything! This follows the Roaring 20s narrative I’ve been talking about for months. Utilities are enjoying newfound interest as nuclear and power generation for AI reinvigorates a sector that now enjoys both safety AND growth.Earnings Impact Semiconductors got a boost from Micron earnings, while small caps are stalling a little. I call the small cap trade my show-me-later trade, while big cap tech is my show-me-now trade. What’s the Rate Cut Impact? Rate cuts can help small caps, later. But real earnings right now can be found in Mag7. We may see a little tug of war between those two baskets as the rate cut narrative gets muddied ever so slightly. Why muddied? Well, markets are hoping for an awful lot of rate cuts, but GDP growth and consumer data is pretty darn good. Small caps need more cuts but if we don’t get them… well it’s back to the Magnificent7! On the Horizon What’s for next week? Markets could be free to roam about the cabin as big option positions are rolled away. That means a big move may be upon us. I’m tempted to think it’s up. Mutual fund and other asset managers are lagging the SPX performance YET AGAIN, and that could mean they scramble to catch-up in strong names. They don't want to tell clients "you don't own MSFT and NVDA"! So things look good to me but.... there’s just that little thing called The Election to worry about. In my income portfolio I’m leaning long but with some plays that can capture these juicy option premiums.In My Portfolio I closed my MSTR backspread for a 227% win. Closed my Micron calendar for a 70% gain in one day. Covered Dell puts for a 77% gain. Goldman Sachs puts for a 76% gain. And CRM puts for a 71% gain. Got called away early on META for a 12% gain but also covered some META put sales for a 65% gain in 3 days. Life is good. What to Watch Watching UBER, PYPL, BABA, and AMZN (very reasonable Mag valuation and an AI juggernaut that monetizes AI NOW). Talk Soon, Hans Head of Option Pit Income —-------------- SL: CPI and Market Update Hey guys, This is our first day of live correspondence for OPtion Pit Income - here we go… Overall State of the Market All-time highs yet again but amazingly that’s not the most interesting thing about this market. The fascinating part is that stocks are rising steadily into a super cautious volatility backdrop.VIX and VIX futures are standing strong like the Pittsburgh Steelers’ defense. They can’t be moved! I’ve been trading for options cash flow for almost 30 years now and I can’t recall a more solid example of 'climbing the wall of worry' as I’m seeing now.What’s the worry about? The usual suspects lately: Iran/Israel, the election… but maybe bubbling below the surface is this...I’ve been warning about it. Rates are priced for recession and stocks are priced for good times and growth. Guess which one is wrong? Rates probably. This economy is hot. But guess what lower rates help? A massive part of the economy and employment. This is all part of my Roaring 20s narrative. The worry part of the equation is actually going to juice an economy that’s already doing well thank you very much. Stocks don't mind, for now.But what’s the downside? That the punchbowl gets spiked too much. And when animal spirits kick in and the party gets a little too rowdy… well, we might just see a little more pressure on inflation. Just maybe. Remember the 1970s re-ignition of inflation? That would be no bueno. CPI? As I suspected, stronger than expected this morning. That matters more than a bit, and THAT might actually be something to worry about, after inflation was "conquered" only a month ago. Dockworkers just got a huge pay raise, shipping costs have been rising, and used car prices have been firming. Let's see how things shape up over the next few months. But for now I continue to cautiously bet on the punchbowl. For You Guys…For Option Pit Income traders this works just fine. Option premiums are high into worried sentiment indicators. Over the next few weeks I’ll be talking about what I’m entering and exiting. We exited several positions this week: - Covered Visa cash-secured puts for a 6.5% gain. - Covered McDonalds cash-secured puts for a 52% gain. - Salesforce puts for a 89% gain and Eli Lilly for a 65% gain. - Amazon puts are still open and profitable, and I set up an upside risk reversal that could make big if Bezos’ Beauty heads over $200 like I think it will. A few weeks ago I put on my last risk reversal for 0.38 and sold it for $5.88. What to Watch The watchlist includes TSLA into the FSD event. I bailed on my calendar idea as the back end in November got a little rich. I’m looking to re-hook some energy exposure as things remain tense in the Middle East. Our MSTR 1x2 ratio put spread is sitting right where I like it. I’ll tell you about that cool trade next time. Can this market keep defying the odds? All eyes on CPI and PPI.Remember our goal here is to protect your assets and create an environment for a great retirement. I’ll have some free reports and gifts for you soon. 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