We Sold (Puts) in May and Got Away With 7 Winners
Last week was the best week for stocks since November 2020, with the S&P 500 up more than 6%. This snapback rally ended a seven-week losing streak that saw the index briefly cross over into bear market territory. Yet, as of midday, the S&P 500 is on track to close roughly flat for the month of May.
May’s roller-coaster ride, which no doubt nauseated plenty of investors, was ideal for option sellers, or at least those who are members of my Options Income Blueprint service.
We closed seven winners this month, booking $263 in cash and earning excellent rates of return.
As you can see, the majority of these trades were open for just a few days, and our annualized return on all but one easily exceeded our 26% goal.
In the latest Options Income Weekly, I discuss last week’s trades and how closing our Delta Air Lines (DAL) position early allowed us to book a triple-digit annualized return.
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?
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