Trade Findings and Adjustments 03-14-24
Currently: Bad Inflation data, inflation heading higher vs lower
Why is this important?= NO RATE CUTS coming soon
IF we have higher inflation in April No rate cuts until December
What could throw a damper on the market?
- TAX selling in March and April coming up
- March usually a down/bearish month in the market
- Higher inflation
Cramer – Mad Money Yesterday He did a show on his “mistakes”
In general 8 mistakes on a 31-33 stock portfolio
“Never try to catch a falling knife”
Let’s talk about different investing options for the everyday person
Portfolio Creation – Stock Picking 1 out of 3= 33.3% chance of making money= Gambling
Mutual Funds/ETFs/ or other pool trading = Diversification fees 5-9%
Day Trading=Gambling
Options, Commodities, Currency, Token, Options, – 33.3% chance of making money
Even if you are 50/50 the downs are much more pronounced than the ups
True protection is a mix of Long Puts and Stock Ownership
IF I was looking for a trade I would look for a beaten down stock, over-sold
Sept or Dec 24 7/8 Bull Call
Exit the trade (Primary Exit) around $7.70 Range
IF it goes down to $6.50 I would exit the short at 8, take a profit and let it run back up
Buy the stock at $7.07 with a Sept 7.50 Short call for $0.78 credit
Max return 7.50 – 7.07 + 0.78 = $1.21 / 6.29 cost basis 19.23 % ROI
HI Financial Services Mid-Week 06-24-2014