This is a Fundamentals-First Kind of Market
The S&P 500 narrowly avoided closing in bear market territory on Friday thanks to a comeback in the final hour of trading. But the broader market index still lost more than 3% for the week, extending the longest losing streak for stocks in decades.
At Options Income Blueprint, we closed two modest winners last week on travel-related plays Delta Air Lines (DAL) and United Airlines (UAL). Together the positions yielded $30 per contract sold for a 0.4% return on our capital.
While that rate of return is lower than we typically target, a market as volatile as this one requires that traders remain nimble and adapt. I’m willing to accept slightly lower-than-usual rates of return in the interest of protecting our capital and avoiding undue risk.
Another way I’ve been adapting to current market conditions is by placing an even greater emphasis on fundamentals. As I discussed here last week, since there is always a chance a put seller can be assigned shares of the underlying company, it is important that they would be perfectly fine owning shares, perhaps for an extended period of time. This is especially true when we’re flirting with bear market territory.
This focus on fundamentals, as well as real-world trends, leads me to one of the latest additions to the Options Income Blueprint portfolio: ZIM Integrated Shipping Services (ZIM).
We closed our first winner on the Israeli international cargo shipping company earlier this month. Last week, we opened another put trade after the company reported record income and better-than-expected revenue for the first quarter and upped its full-year guidance.
In the latest Options Income Weekly video, I review last week’s performance and take a closer look at ZIM Integrated Shipping Services’ fundamentals and how they are translating into income for members.
Just how correlated are consumer expectations with the reality of the market? Can this be used to predict where market prices will go?
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.
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.
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.
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?
267 Kentlands Blvd #225
Gaithersburg, MD 20878
P. (866) 257-3008
(Monday-Friday 9:00 AM-5:00 PM EST)
Publisher of actionable and proven strategies and tactics to help investors build wealth and reach seven-figure portfolios.
Get notified about new articles, special events, training, and much more
Leave your info below to get more options and trading ideas to your inbox
Yes, send me news to my inbox.