I do live trading on my Twitter and would like to post the real option trades that I am doing, and what my current watchlist is. Follow along on my journey to $1 million.
1-on-1 Private Coaching via Zoom is now available. Whether it is portfolio building and review, formulating a personalized options strategy, or the basics of how to trade - I'll make your portfolio relevant. Email me here or DM me via social media.
** YouTube Commentary** : Here
It was a nice end to a choppy week last week, and although a lot of retail investors might not understand what is going on right now, I am here to help make it clear. It seems like bad news is good and good news is bad. Almost unbelievable that a complete garbage jobs report from Friday will send markets propelling upwards. One would think that the US reporting only 260k new jobs when 1 million new jobs were predicted in April would send markets into some what of a panic sell off, especially on a Friday?
Actually it is simple. If the economic data comes out as bad, investors get a boost of confidence that the federal reserve wont manipulate interest rates anytime soon, and that they will provide support to keep boosting the economy. If economic data is good and the economy shows that it will be a quick recovery back to pre-covid levels, investors are worried that the fed might start raising interest rates and buying back bonds. What we assume is that once interest rates go up, stocks, especially tech and growth, will pull back because money is more expensive to borrow. However, the Fed and Jerome Powell has said many times that they wont even consider raising rates until 2023. Investors seem to not believe this because so far in 2021 with all the vaccine rollouts and states opening back up, the economic data has been very good. Better than expected. Therefore, tech and growth are pulling back and capital transferring to cyclicals, as investors are fearing an early rate hike.
For me the silver lining to this is that the US economy is seemingly recovering faster than expected. However the rate hike still looms on the horizon. I can't say whether investors will ever accept the Fed's 2023 goal or not. I hope that investors do accept this, or that the economic recovery isn't so fast. It seems counter intuitive but sensible that the stock market wants the Fed to have its back. That is really what it is boiling down to right now.
This week will prove pretty important for tech and growth stocks, especially ARK Invest funds. It is a little hard to say how investors will react at opening bell Monday. There is no real reason for me to believe that it will be smooth sailing this week.
Last week we wrote about the 3 ETFs that will perform well during an fast economical recovery. Again they are: $NAIL, $UDOW, $FAS
These should be high priority to add funds too in my opinion. Like stated above, these will do well with good economic data and TQQQ, ARK's and SOXL will do well with poor economic data.
Short term options trading is reactionary for me, so I will wait to see how markets open. As of time of writing, tech futures are pointing down and cyclicals are up.
Some earnings that are coming out this week that I will have my eye on are:
I don't hold options through earnings, however I will be eager to see how they turn out after the data is published. All of the above, as well as many more growth and innovation stocks, are and have been trading sideways after taking a beating in March. It can be a long road for these plays, however there will be a point in time when growth takes the lead again. If you are patient, this can be excellent.
Follow me on Social Media!
Webull Account-2 Free Stocks with a chance to get $FB Facebook
Disclaimer: The comments opinions and analysis expressed herein are for informational and educational purpose only and should not be considered as individual advice or recommendations. Prostockadvice.com is not responsible or liable in any way for opinions expressed here. This is not meant to be financial advice as we are not a licensed financial advisor.