Options, Futures & Derivatives

 Knowing that you timed a trade perfectly is one of the best feelings an investor can experience. Even if you’ve had scores of winning trades over the course of your trading career, the rush of making a great call never goes away. Today, I want to talk about a recent victory of mine — not to brag, but because there is something more I want to share with you. If you’re ready to take your trading to the next level, this could be a game changer. #-ad_banner-#Earlier this month, I warned traders to stay away from former market darling Chipotle Mexican Grill… Read More

 Knowing that you timed a trade perfectly is one of the best feelings an investor can experience. Even if you’ve had scores of winning trades over the course of your trading career, the rush of making a great call never goes away. Today, I want to talk about a recent victory of mine — not to brag, but because there is something more I want to share with you. If you’re ready to take your trading to the next level, this could be a game changer. #-ad_banner-#Earlier this month, I warned traders to stay away from former market darling Chipotle Mexican Grill (NYSE: CMG). The company has been desperately spending to restore its reputation and sales after outbreaks of E. coli and other food-borne illnesses at several locations sickened hundreds of people across the country. But a look at the company’s fundamentals (and its empty restaurants) made it clear that a turnaround had so far eluded the company. Despite this, shares were trading at an astronomical 115 times estimated earnings, the highest in the stock’s history. And with the company scheduled to report Q3 earnings on Oct. 25, my models were showing a high likelihood of an earnings miss. Sure enough, when… Read More

As the broader market bull looks ready to be put out to pasture, one beaten-down group may be about to turn higher.  Since we’re looking at the early stages of a potential multiyear uptrend for the sector, traders who get in now could see substantial gains. And one market leader that is trading at fire-sale prices and throws off a 5% dividend yield could be the perfect way to play this turnaround. #-ad_banner-#​Cycles Always Come Full Circle Agriculture is one of my favorite long-term themes, with global food demand set to outpace production capacity. This will drive the need… Read More

As the broader market bull looks ready to be put out to pasture, one beaten-down group may be about to turn higher.  Since we’re looking at the early stages of a potential multiyear uptrend for the sector, traders who get in now could see substantial gains. And one market leader that is trading at fire-sale prices and throws off a 5% dividend yield could be the perfect way to play this turnaround. #-ad_banner-#​Cycles Always Come Full Circle Agriculture is one of my favorite long-term themes, with global food demand set to outpace production capacity. This will drive the need for fertilizers — an extremely cyclical sector that has finally started to rebound. Fertilizer producers have felt a lot of pain over the past several years. Booming capacity in China was one culprit, as it led to price pressure from imports. Another was lower crop prices, due in part to record high harvests, which weakened demand for fertilizer. However, it looks like these pressures are set to ease, leaving U.S. fertilizer producers primed for a rebound.  Shares of CF Industries (NYSE: CF), the largest nitrogen fertilizer producer in North America, are more than 65% off their 2015 highs. But they are set… Read More

When I first noticed a bearish triangle formation on the chart of the S&P 500, I had a strong sense that a sell-off was coming. This is one of the more powerful bearish signals, and sure enough, the dramatic drop on October 11 and lack of an immediate bounce demonstrated underlying weakness. With market fundamentals still shaky, this could very well be the start of a larger correction. An Earnings Downturn To Rival The Great Recession Even though earnings growth is expected to turn positive in the fourth quarter, it’s much too soon to break out the champagne. Analysts expect Q3… Read More

When I first noticed a bearish triangle formation on the chart of the S&P 500, I had a strong sense that a sell-off was coming. This is one of the more powerful bearish signals, and sure enough, the dramatic drop on October 11 and lack of an immediate bounce demonstrated underlying weakness. With market fundamentals still shaky, this could very well be the start of a larger correction. An Earnings Downturn To Rival The Great Recession Even though earnings growth is expected to turn positive in the fourth quarter, it’s much too soon to break out the champagne. Analysts expect Q3 to be the sixth straight quarter of declining earnings growth, tying the Great Recession for the longest earnings recession on record, according to data compiled by Bloomberg. #-ad_banner-# Goldman Sachs (NYSE: GS) Chief U.S. Equity Strategist David Kostin wrote in a note to clients that they should expect a below-average number of companies to report positive earnings surprises.  What’s more, he said: “We see a weak third-quarter reporting season coupled with negative fourth-quarter EPS revisions pushing stocks 2 percent lower to our year-end target of 2,100.”  Earnings growth has been negative… Read More

Earnings season kicked off last week, with Alcoa leading off by reporting disappointing results last Tuesday. Q3 Earnings for S&P 500 companies are expected to drop 2.1%, according to FactSet. As my colleague Jared Levy recently noted, this would mark the sixth consecutive quarter of year-over-year declines. #-ad_banner-#Sounds troubling, right? Add that to the ongoing list: The Federal Reserve’s dithering on whether or not to raise rates… stagnant GDP growth… tepid jobs numbers… a slowing Chinese economy… Brexit… a looming U.S. Presidential election… it just keeps piling up. Hopefully none of what I’ve said up to this point has you… Read More

Earnings season kicked off last week, with Alcoa leading off by reporting disappointing results last Tuesday. Q3 Earnings for S&P 500 companies are expected to drop 2.1%, according to FactSet. As my colleague Jared Levy recently noted, this would mark the sixth consecutive quarter of year-over-year declines. #-ad_banner-#Sounds troubling, right? Add that to the ongoing list: The Federal Reserve’s dithering on whether or not to raise rates… stagnant GDP growth… tepid jobs numbers… a slowing Chinese economy… Brexit… a looming U.S. Presidential election… it just keeps piling up. Hopefully none of what I’ve said up to this point has you panicked. That’s not my intention. But if all of this gloom and doom (and uncertainty) has you feeling nervous for how this will affect your portfolio, remember that there’s nothing new under the sun. In fact, we can turn to history as a guide. For starters, here’s a piece of information that should come as no surprise to anyone who’s been paying attention… the stock market is increasingly looking overvalued. With a price-to-earnings ratio of about 25, the S&P 500 is on the upper end of its historical valuation. Since 1900, the S&P 500 usually peaks at a valuation in… Read More

I consider myself an early adopter of technology, and when it comes to Apple (Nasdaq: AAPL), I’d say I’m borderline obsessive. In fact, my obsession goes back to the early 1980s, when I first laid my hands on my Apple II home computer.  But it isn’t just about having the latest and greatest. Owning and testing Apple’s newest products helps me to keep tabs on the world’s largest company. This obsession with Apple and its stock is shared by millions of consumers and investors. At the start of 2016, there were more than 1 billion Apple devices in active use… Read More

I consider myself an early adopter of technology, and when it comes to Apple (Nasdaq: AAPL), I’d say I’m borderline obsessive. In fact, my obsession goes back to the early 1980s, when I first laid my hands on my Apple II home computer.  But it isn’t just about having the latest and greatest. Owning and testing Apple’s newest products helps me to keep tabs on the world’s largest company. This obsession with Apple and its stock is shared by millions of consumers and investors. At the start of 2016, there were more than 1 billion Apple devices in active use around the world, and AAPL is one of the most heavily traded stocks in the world. #-ad_banner-#Apple’s cult-like popularity, unique products and sheer size make it a target for pundits, fanatics and haters alike. For the past year or so, it’s been the haters who’ve controlled the stock. The bears’ major argument is that Apple will struggle to grow in the future because it is a one-trick pony that lacks innovation now that Steve Jobs is gone. And it’s true that two-thirds of Apple’s revenue came solely from the iPhone in 2015, while new products have been slow to develop. … Read More

I can’t believe more people aren’t taking advantage of this… For the past few years, my colleague Amber Hestla and her readers have been “skimming” from Wall Street. And the best part: it’s all perfectly legal. In fact, it’s one of the safest methods of earning extra income to be found in any market environment. Allow me to explain… With bond yields near record lows and traditional income securities like savings accounts and certificates of deposit earning next to nothing, we’re regularly finding “instant yields” as high as 9.2%… 13.7%… and even some as much as 19.8%. In the past,… Read More

I can’t believe more people aren’t taking advantage of this… For the past few years, my colleague Amber Hestla and her readers have been “skimming” from Wall Street. And the best part: it’s all perfectly legal. In fact, it’s one of the safest methods of earning extra income to be found in any market environment. Allow me to explain… With bond yields near record lows and traditional income securities like savings accounts and certificates of deposit earning next to nothing, we’re regularly finding “instant yields” as high as 9.2%… 13.7%… and even some as much as 19.8%. In the past, our research is showing opportunities to collect a $1,575 cash payment from Visa (NYSE: V) for a 7.8% yield… a $980 cash payment from Starbucks (NYSE: SBUX) for a 12.8% yield… and, as I’ll show you today, we’ve even identified an opportunity to earn a $1,608 payment from International Business Machines (NYSE: IBM) for an 11.5% yield. —Sponsored Link— The Rare Chance to Build Unbelievable Wealth is About to Occur… ​When the stock market crashed in 1929, millions were devastated. But a savvy few used the crisis to catapult themselves into unprecedented wealth and fortune. Read More

One of the major questions on investors’ minds — besides when the Federal Reserve will stop kicking the can down the road and who the next occupant of the White House will be — is whether oil has reached a bottom.  While we can’t be sure yet, it’s possible oil bottomed earlier this year and is now in a trading range with a lower boundary near $40 a barrel. But whether oil has bottomed is really more of an important question for futures traders who buy and sell the commodity. For stock market investors, a better question to ask is… Read More

One of the major questions on investors’ minds — besides when the Federal Reserve will stop kicking the can down the road and who the next occupant of the White House will be — is whether oil has reached a bottom.  While we can’t be sure yet, it’s possible oil bottomed earlier this year and is now in a trading range with a lower boundary near $40 a barrel. But whether oil has bottomed is really more of an important question for futures traders who buy and sell the commodity. For stock market investors, a better question to ask is whether an energy stock’s current price reflects oil’s decline or whether a company has adapted to lower oil prices. —Sponsored Link— This Stock Keeps Making Shareholders Triple-Digit Profits Every time this stock heats up — triple-digit gains soon follow. The first time AGHI started running, investors could have grabbed 243% returns. The second time? It shot up 390%. This time is could hit 1,775%. See why here. One name that gets a resounding “yes” to both of these questions is Tesoro (NYSE: TSO). The stock fell more than 40% from its… Read More

The $28 billion merger between Spectra Energy (NYSE: SE) and Enbridge (NYSE: ENB) may mark a turning point for master limited partnerships (MLPs). Over the past two years, asset prices in the sector have crumbled as oil prices plunged, but stabilization in energy prices and recent consolidation are breathing new life into the group. Most partnerships are at least marginally protected from falling energy prices through sales agreements based on the volume of products transported or stored. However, that doesn’t mean they’re entirely immune.  MLPs pay out almost all of their cash flow as distributions and must continuously issue partnership… Read More

The $28 billion merger between Spectra Energy (NYSE: SE) and Enbridge (NYSE: ENB) may mark a turning point for master limited partnerships (MLPs). Over the past two years, asset prices in the sector have crumbled as oil prices plunged, but stabilization in energy prices and recent consolidation are breathing new life into the group. Most partnerships are at least marginally protected from falling energy prices through sales agreements based on the volume of products transported or stored. However, that doesn’t mean they’re entirely immune.  MLPs pay out almost all of their cash flow as distributions and must continuously issue partnership units (stock) or debt to grow. Weakness in energy prices led to lower cash flows and increasing debt loads, scaring lenders for debt issues while investor sentiment fell faster than share prices. #-ad_banner-# Now energy prices are stabilizing and companies are positioning for the future. I’ve found a way to play this trend that can reduce the risk associated with individual names while providing a cash yield twice as large as other dividend plays. Buyers Coming Out As Energy Turns A Corner The deal between Spectra and Enbridge is the fourth… Read More

Mark your calendars. Tomorrow, Sept. 21 at 2 p.m. Eastern, is when the Federal Open Market Committee will announce whether or not it will raise interest rates. This, as my colleague Jared Levy points out, is an event that could easily turn this market on its head.  If the Fed takes a dovish outlook and chooses to not raise rates, then it could fuel another short-term rally (at the expense of risking higher inflation down the road). Jared recently pointed out to his Profit Amplifier readers that this seems to be what the consensus is expecting;… Read More

Mark your calendars. Tomorrow, Sept. 21 at 2 p.m. Eastern, is when the Federal Open Market Committee will announce whether or not it will raise interest rates. This, as my colleague Jared Levy points out, is an event that could easily turn this market on its head.  If the Fed takes a dovish outlook and chooses to not raise rates, then it could fuel another short-term rally (at the expense of risking higher inflation down the road). Jared recently pointed out to his Profit Amplifier readers that this seems to be what the consensus is expecting; both Bloomberg and Goldman Sachs believe there’s only a 25% chance we’ll see a rate hike next week. (My money is still on a rate hike by the end of the year, though.) Still, even though the odds are low this time around, a rate hike is still very much on the table. As many as six members of the 10-member committee have issued generally hawkish comments on the public record. So it’s just a matter of “when,” not “if.” And when the Fed does raise rates, then expect the news to trigger massive selling and a general reversal in… Read More

I think it’s safe to say market sentiment is not particularly positive these days. Billionaire investor Ken Fisher says this is the “most joyless” bull market ever seen, while my research has been warning for some time that we are headed for a market correction… or worse. When investors are worried about a sell-off, and even when stocks begin to correct, they flock to defensive sectors such as consumer staples and utilities. The companies in these sectors provide the goods and services people need whether we are in an economic boom or a recession. — Sponsored Link —… Read More

I think it’s safe to say market sentiment is not particularly positive these days. Billionaire investor Ken Fisher says this is the “most joyless” bull market ever seen, while my research has been warning for some time that we are headed for a market correction… or worse. When investors are worried about a sell-off, and even when stocks begin to correct, they flock to defensive sectors such as consumer staples and utilities. The companies in these sectors provide the goods and services people need whether we are in an economic boom or a recession. — Sponsored Link — This Shocking ‘September Surprise’ Could End Hillary’s Chances There’s evidence from an ex-advisor to the CIA that an event in September could derail any chance Hillary ever had of beating Donald Trump. It’s not another ISIS attack. It’s not another scandal. This is a planned financial announcement that could turn millions of Americans against the Obama legacy… and against Hillary, the one candidate who clings to it. Click here to get a sneak peek. Most defensive names also distribute dividends, allowing investors to park money in shares and collect a check even though… Read More