Read This Before This Week’s Fed Meeting

Last Week's Income Report: June 13th, 2022

The S&P 500 has again entered bear-market territory, as the sharp selling that began Friday after new inflation numbers were released continued today. 

The major indices saw their recent gains wiped out on news that the consumer price index (CPI) rose more than expected in May, up 8.6% from a year ago in the fastest rise since 1981. This has caused concern that the Federal Reserve may take a more aggressive approach to hiking interest rates at its meeting this week. 

We closed two more winners in Options Income Blueprint last week, earning $52 in cash.

While the cash per contract may not seem like much, there are two things to keep in mind.

First, our annualized rate of return for both trades was well above our goal of 26% a year. Second, as Friday’s market rout reminded us, this is the kind of market where being greedy can really hurt you. 

In addition to closing early, we have been adapting to this volatile market in the following ways:

  • Trading some names over and over like ZIM, semiconductor stocks and the airlines
  • Plus, trading new names like SONO and Starbucks (SBUX)
  • Selling puts that are further out of the money to give us more flexibility in managing positions
  • Being willing to accept smaller-than-usual profits

But as you can see in the table above, “smaller-than-usual profits”’ doesn’t necessarily mean smaller-than-usual returns on our capital. 

If you sell options, I urge you to consider a similar approach given the wild swings in the market. In particular, traders should be extra careful ahead of this week’s Fed meeting, as the central bank’s comments have taken on outsized importance of late.

In the latest Options Income Weekly, I discuss last week’s trades, creating a bullpen and how to trade a potential recession on the horizon.

Is the Consumer Expectation Index a Leading Indicator?

Is the Consumer Expectation Index a Leading Indicator?

johnh
On June 28, 2022

Just how correlated are consumer expectations with the reality of the market? Can this be used to predict where market prices will go?

Keep reading…

A Case For A Bearish Reversal

A Case For A Bearish Reversal

johnh
On June 27, 2022

Then something happened in the market today and this one chart may be presenting a different side to the story. This chart pattern may be signaling the next leg down is right around the corner and now is the time to get ready.

One Stock To Watch Next Week

One Stock To Watch Next Week

johnh
On June 23, 2022

Let’s look at a strategy you can use by selling stock options to potentially take advantage of a near-term bump in the ride-sharing companies.

Most Successful Options Strategy

Most Successful Options Strategy

johnh
On June 22, 2022

Selling options for weekly premiums can be a good strategy if you know how to navigate the extreme peaks and valleys each week.

What’s Really Behind The Mega-Cap Move?

What’s Really Behind The Mega-Cap Move?

johnh
On June 21, 2022

If you are an options trader and want to take on a little risk, I’ll show you an options trading strategy with a potential 55% gain by July 22, 2022.

All Eyes On Energy

All Eyes On Energy

johnh
On June 20, 2022

With the Energy stocks beaten up so much last week, I wouldn’t be surprised if we see a little bump back up this week.

I have an idea for an Energy trade.

Shake Out Or Another Leg Down?

Shake Out Or Another Leg Down?

johnh
On June 16, 2022

Get Today’s Trade Idea

We’re going to stick with point-and-figure charts today. The energy sector has been red hot but has lost some ground over the last few days. Oil and Gas companies could be negatively affected by a slowing global economy.

5 Things You Need to Know About Fed’s Biggest Rate Hike In Decades

5 Things You Need to Know About Fed’s Biggest Rate Hike In Decades

johnh
On June 15, 2022

What is the Fed Doing?
In an effort to combat out-of-control inflation, the Fed is increasing interest rates to slow down the growth of the economy. The trick is to do so without causing a recession.

Is Zoom a Buy or Sell Right Now?

Is Zoom a Buy or Sell Right Now?

johnh
On June 14, 2022

Zoom has become so part of our vernacular, that people use it as a verb. Sort of like how people ask for a Kleenex, even though that’s just a name brand of facial tissue. So if everyone is still Zooming, at home, at work, and at school, why has the stock been falling?

Timing The Bottom

Timing The Bottom

johnh
On June 13, 2022

Keep reading to see if discretionary spending and the price of oil are correlated and if we can pick a market bottom.

PREV NEXT

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