It would seem that the “new” economy we live in — one where we order everything online for fear of walking into stores — would benefit the companies that provide the infrastructure and transportation to make that happen. Fundamentally, that makes sense. But we’re chart readers here, and the charts are telling us something different. [Read more…]

The guys at ASC are out with a piece this week highlighting the weakness under the hood in some of the biggest sectors in the US Stock Market. Read it here.

One of the poster children for weakness we want to get short ahead of another possible leg down is setting up right now. [Read more…]

You know who wins in volatile markets? The companies that collect fees on every trade — that’s who. Seems like a no-brainer, right?

And that concludes my deep dive into fundamental analysis.

Now let’s take a look at a great technical setup in the exchanges space.

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Since I’ve got a little positive delta building in my portfolio and I’m leaning towards the market feeling a bit overextended here, I’m adding a little negative delta in an index to help balance the risks in my portfolio a bit.

And of course, it makes the most sense to get short the weakest (in relative terms) index to express this hedge.

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Options premiums are still pretty elevated across the landscape and the default mode for me when looking for trades to put on is still to prefer selling premium to express any directional bets.

However, JC put some bullish metals ideas in my head last week that are starting to look interesting to me. And there’s one in particular that warrants a shot with a debit spread — where we can use the prevalence of still high options premiums to help us lower our cost of participation in a directional bet. [Read more…]

Just a couple weeks ago, we put on a delta neutral credit spread in the Industrials $XLI to take advantage of pumped up volatility. That trade worked out quickly and we got out of it at our price target on Monday of this week. One for the good guys.

Now, $XLI is bumping up against some formidable upside resistance. And with options premiums still elevated, we’re going to use them to leverage into a bearish directional bet here. [Read more…]