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As I was analyzing the markets this morning, I noticed something very interesting happening under the surface... The options market is starting to price in a potential Fed put again. Let me break this down for you... Dealers — the big market makers — are increasingly short upside calls on the S&P 500. This means they’re hedging against a big move higher. Why would they do that? Well, it seems the market is starting to price in the Fed stepping in to put a floor under stocks if we see a deeper pullback — a Fed put. You see, the market had basically priced out any chance of a recession, with the S&P 500 not really pricing in much downside risk at all. But that dynamic appears to be shifting... Dealers are getting short upside exposure, likely because their customers, retail traders like you and me, are rushing to buy out-of-the-money call options, betting on a breakout to new highs. This "call skew" forming in the options market is a classic sign that the Fed put is back in play. Traders are positioning for the Fed to ride in and save the day if stocks start to tumble. The central bank may feel compelled to step in and prop up markets, just as they've done numerous times in the past. Now, I'm not saying this is a certainty... The market could certainly continue higher without the Fed's help. But the options activity is flashing some warning signs that traders are starting to get a bit too complacent about the upside. When everyone is piling into calls, expecting the Fed to have their back, that's usually when we see a nasty reversal. So I'll be keeping a very close eye on this dynamic in the options market. If the call skew continues to steepen, and dealers remain stubbornly short upside exposure, that could be a sign that a pullback is brewing. The Fed may feel pressure to step in and stop a deeper sell-off, putting a floor under stocks. As always, I'll be ready to adjust my positioning accordingly. I'm not trying to be a perma-bear here — I'm just reading the tea leaves and positioning myself for what the market may have in store. Stay tuned, because this Fed put saga should get very interesting in the weeks and months ahead. Also, don’t forget to join me at 5 p.m. ET TODAY, Aug. 27, for “30 Minutes of Awesome”! I’ll give my current read of the market, and analyze your ticker in real time to close the show! Just go here! Jeffry Turnmire Jeffry Turnmire Trading Follow along and join the conversation for real-time analysis, trade ideas, market insights and more! Telegram: https://t.me/+6TdDE7-F6GlhMmJh *This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. CNBC and Fox Business Are Too Busy Talking About These 2… You won’t hear about this from CNBC, The Wall Street Journal, Bloomberg or Fox Business… They are all too busy talking about these two… And by the time they pick up this story, it could be too late for you. You see, I have undeniable evidence that a market crash could potentially take place within the next two months… A nightmare scenario I’m calling “America’s Darkest Hour.” Where we could see retirement accounts get completely wiped out in a matter of months, if not weeks. And that’s why I’m doing something radically different from virtually any other investing professional out there… I’m abandoning 8,249 of the 8,252 publicly traded stocks… And instead focusing on only three tickers… Why? Today’s Daily Chart Setup This idea came directly from Jeffry Turnmire’s Daily Chart Setup that automatically signals potential plays. You can find full details on exactly how this works by scrolling down further in this newsletter. Keep in mind that this is for informational and educational purposes only. Trade at your own risk. Morgan Stanley (MS)
Always remember that past performance is not indicative of future results — anything can happen in trading! How the Daily Chart Setup Works Here’s a more detailed description of how the pattern triggers: 1. The price breaks upward through the orange Market Roadmap Line. 2. Then the price goes up and down while staying above the line. Eventually, it comes down to touch the line again — this could take days, weeks or even months. 3. Once it touches the line and starts moving back up, that signals an entry. I use Fibonacci levels for for profit targets and stop losses, and these two tools combined have helped me achieve a 77% win rate over the past six-plus years! You can grab my Market Roadmap Indicator here for just $5 — less than a cup of coffee at most places! Want to get a link to TradingPub content, trade ideas, real-time market analysis and educational tidbits? We have you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, click here. To download to your Android device, click here. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, click here. To download onto your MacOS, click here. 3. Then add our channels by clicking these links!
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