Market Mayhem Makeover! 🚀 Our daily updates just got an upgrade:
S&P 500: Your broad market snapshot.
Spread Bet Blitz: Hot trades across stocks, commodities & FX! We're up 28% in one month (12 wins, 1 loss!) on our live spread betting account (tax-free in some areas!). Track every move, stop loss, & profit target in our daily spreadsheet (works for stocks/futures too!).
Options Unleashed: Follow our 2024 option plays with updated commentary.
Long-Term Lions: Our buy-and-hold portfolio (think CTRA, ENT.L, JDW.L) – see EquityScan for deeper dives. Coterra? Hold, not buy right now.
Other topics: Earnings, Natural Gas etc...
PLUS: Phase 1 of EquityScan is about to be released! Your feedback is crucial as we build Phase 2 of EquityScan: Your own portfolio & trade trackers! Tell us what you need so we can deliver the ultimate trading tool for you. Let's conquer the markets together!
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S&P 500
S&P 500 Snapshot: The index dipped 0.5% to 6040 on Friday, but futures are currently pointing to a hefty 2% selloff at the open. Earnings season is strong, but new highs remain elusive. Trump's tariff talk adds a layer of uncertainty. Will the market finally react to inflation, geopolitics, and now tariffs (which Trump warns could bring short-term pain)? We suspect volatility ahead, potentially pushing bond yields towards 5% which should cause a selloff in stocks—a possible buying opportunity. We're waiting for a better entry point on the index. We will discuss more on the management of SPY in our Options Section. More big earnings this week will be key. Of course, it's still early, and this selloff could worsen or reverse as we've seen recently with investors buying the dip. We'll be watching closely!
Spreadbet Blitz :
🚀 Our portfolio crushed it in January, soaring 28%! Even with our Morningstar position currently down, we're still killing it. Here's the Morningstar plan (see below). No new spread bets today—just patiently watching stocks & commodities (like Natural Gas) for perfect setups.
Morningstar Update: Our MORN trade is currently underwater, a reminder that not all trades are winners right away. We're still far from our stop-loss (see spreadsheet) and holding for now. However, the new Mexico/Canada tariffs are a wildcard. We're watching closely and may cut our losses if needed. No new MORN trades recommended. No earnings risk until Feb 20th. Last close: $328 (down 0.6%).
Options Unleashed:
SPY Options Update: SPY closed at $601.82. We're watching the tariff fallout closely and may initiate risk management near $580. Quick recap: We initially bought a $590 put, sold $580 & $560 puts (Feb 21st expiry), netting $45. We then sold the $590 put for $295, totaling $340 credit. Now, we're short the $580 & $560 puts, targeting $340 profit if they expire worthless. Time decay ("theta") is our friend here. $345 in time value remains. Risk management: Conservative (close $580 put for $250 ) or Active (hold $580, roll to $560 March expiry if SPY hits $590). I'm going with active management, watching SPY closely due to tariff volatility.
XSP Short Put Update: XSP closed at $604.05 on Friday. We're monitoring the tariff situation, but our February $550 short puts look safe for now. Quick recap: We sold these mini S&P 500 puts on January 3rd for a cool $300 premium. They're now worth $53, putting us $247 in the green! If XSP stays above $550 by February 21st, we keep the full $300. We're holding tight for now, but those tariffs could stir things up. We'll be watching the market closely this week.
TLT Short Put Update: TLT at $87.76 after a quiet Fed meeting. We sold the $84 put (Feb 21st expiry) for $108 premium (breakeven $82.92). Our initial goal was assignment (buying TLT at $84), but with TLT above $84, that's less likely. New plan: Let it ride! If TLT stays above $84, we pocket the $108. We might not get the shares, but we're still set for a win. BUT: The recent Mexico/Canada tariffs throw a wrench in things, potentially reigniting inflation fears. This puts our 5% 10-year bond yield target back into the mix as investors reprice the inflationary risk. If this does occur we may still get the shares of TLT. We're watching closely. Only time will tell!
EUR/USD Short Put Update: The Euro is at 1.0236 against the dollar. We're sitting pretty on our March 7th put option (strike 1.0000) after collecting a juicy $488 premium! If the EUR/USD stays above parity, it expires worthless and we keep the whole chunk of change. If it drops below, we might be assigned (buying EUR/USD at 1.0000). For now, we're chilling and letting time decay work its magic. However: Those pesky tariffs could throw a wrench in things. A stronger dollar is possible if investors price in a less likely scenario of Fed rate cuts due to increased inflation risk. We're keeping a close eye on this one.
Long Term Lions:
Entain (ENT.L): Still a Winner, But Watch This! 🏇 Entain keeps galloping ahead, up 15% since we picked it! It closed at 707 yesterday (+0.9%), but hold your horses! We see a potential 38% gain long-term, BUT it's nearing resistance, so expect a short-term pullback. Keep your position under 5% (even for a champ like Entain) and use GBP on IBKR to avoid those pesky FX fees. Entain's a long-term play, but smart traders manage risk!
JD Weatherspoon (JDW.L) is Heating Up! 🔥 Shares jumped 0.9% yesterday, breaking a downtrend and soaring past the 50-day moving average. We think this pub chain is ready to pour on the gains! At £6.25, our target is £8.45 within 18 months—a potential 37% surge! Even with UK tax headwinds, JDW.L looks tasty. Remember: Dollar-cost average, keep your position size below 5%, and watch out for currency risk if you're not holding GBP. Cheers! 🍻
Coterra Energy (CTRA): Hold Your Horses! ⚠️ CTRA dipped 2.4% to $27.72 on Friday, but we saw this coming! Overbought signals were flashing, and with natural gas prices plummeting due to warm weather, a pullback was inevitable. Long-term investors: Don't panic! Our $35 target still implies a 30% gain. Coterra's earnings should be strong thanks to higher energy prices. Short-term traders: Consider taking some profits off the table. CTRA is still a solid energy play for the long haul, but expect choppy waters ahead. Stay vigilant!
Earnings Season
Notables from Friday:
Chevron and ExxonMobil both reported their Q4 2024 earnings on Friday, and the results were a bit of a mixed bag. Here's a quick rundown:
Chevron (CVX)
Beat earnings expectations: Adjusted EPS of $1.67 vs. $1.55 expected.
Missed on revenue: $83.43 billion vs. $83.71 billion expected.
Share price reaction: Down 4.2% on Friday.
ExxonMobil (XOM)
Beat earnings expectations: EPS of $2.83 vs $2.77 expected.
Beat on revenue: $95.21 billion vs. $93.44 billion expected.
Share price reaction: Down 2.5% on Friday.
Key takeaways:
Refining weakness: Both companies saw weaker-than-expected results in their refining businesses, which weighed on overall performance.
Oil price impact: The recent decline in oil prices likely contributed to the mixed results and negative share price reactions.
Investor sentiment: Despite beating earnings expectations, the market seems to be focused on the challenges facing the refining sector and the potential for lower oil prices in the future.
It's worth noting that the broader energy sector was down on Friday, so Chevron and ExxonMobil weren't alone in their declines. It'll be interesting to see how these companies perform in the coming quarters as the energy market continues to evolve.
Reporting Today:
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Happy Investing & Trading
Stephen
Invest with Confidence