Before I begin, I wanted to mention how long I’ve been looking forward to the start of October. I’ve been lining up engineering talent to revitalize Slope and also bring some serious strength to SlopeCharts, and that all starts happening Monday. As a person who has lived his life creating products, I couldn’t be more excited about this “new era” of Slope commencing.
As far as the market, I couldn’t be less excited. This is pretty much as bad as it gets for an ursine soul like myself………lifetime highs everywhere, a raging small caps market, and a VIX in the single digits. Absolutely soul-crushing.
I’m not the sort of give up (ummm……..obviously) and I have, in fact, put together five options positions based on one simple premise. I’ll get to the premise later.
For now, let me show you the five positions in question. They all have these elements in common: (1) I own puts against them (2) the puts are in-the-money (3) the options expiration is way out in January 19 2018 (at least), giving me tons of time. (more…)
Long Lockheed Martin (LMT)
Just like almost everything else benefiting from the surge in interest rates……..
I may regret it terribly – – or it may be my finest hour – – but I just bought a substantial options position against the Russell 2000 following the crazy surge we had just now. They are January $1500 puts against the Russell 2000 index itself, and I’m basing it on the simple fact that we are precisely beneath the broken channel for the index. I chose January to give me ample time.
Looks to me like these manufacturers of killing machines are very lofty when viewed by way of these multi-decade long channels. Priced for perfection.
After dramatically dropping 34% from its historical high of 151.85 from mid-2016 to a low of 99.98 in May of this year, the Dow Jones US Retail REITs Index has been stuck in a sideways trading range and is attempting to maintain a stable position above a long-term 40% Fib retracement level of 102.42, as shown on the following Monthly, Weekly and Daily charts.
Longer term, the Monthly momentum and rate of change technical indicators are hinting of further weakness.
In the medium term, the Weekly momentum and rate of change technical indicators are hinting of potential strength. (more…)