CEO --Chief Embezzlement Officer.
CFO-- Corporate Fraud Officer.
BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.
BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewellery, and the husband gets no sex.
VALUE INVESTING -- The art of buying low and selling lower.
P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing.
STANDARD & POOR -- Your life in a nutshell.
STOCK ANALYST -- Idiot who just downgraded your stock.
STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.
FINANCIAL PLANNER -- A guy whose phone has been disconnected.
MARKET CORRECTION -- The day after you buy stocks.
OUT OF THE MONEY-- When your checking account's overdraft hits bottom.
CASH FLOW-- The movement your money makes as it disappears down the toilet.
YAHOO -- What you yell after selling it to some poor sucker for $240 per share.
WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.
INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.
PROFIT -- An archaic word no longer in use.
Any questions? I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts.
You can see every trade made in 8 actual option portfolios conducted at Terry's Tips and learn all about the wonderful world of options by subscribing here. Why wait any longer to make this important investment in yourself?
I look forward to having you on board, and to prospering with you.
Terry
It was a busy week for the bears.
They attacked on all fronts with commodities taking the brunt of the charge. The CRB Index lost 9.0 percent this past week led by silver which lost 27.0 percent. The precious metal's latest parabolic move was accompanied by a huge surge in volume for the iShares Silver Trust Fund (SLV). During the final phase of SLV's bullish move the silver-based ETF actually doubled the April 2, 2011 Saturday Report Page 5 volume of the S&P 500 (SPY). Of course, the advance was accompanied by a short-term "very overbought" extreme in SLV. A correction looked imminent. After weeks of enormous daily gains the correction in SLV came to fruition. It was the largest decline the precious metal since the plunge in 1984 when the Hunt Brothers attempted to corner the silver market.
Oil also took a tumble this past week, losing 14.1 percent. Hopefully, prices will be reflected at the pump going forward. This will certainly help consumers which is always helpful in a consumer driven economy. Remember, consumers make up for 70 percent of the U.S. economy so when necessities such as gas and food are high, there is less disposable income for the "wants" in life. Not being able to buy a few "wants" can be discouraging for the consumer and the U.S. economy. A continuation of this trend will be detrimental for the growth of the economy.
We are already witnessing signs of economic erosion. The Q1 GDP from a little over a week ago stated a growth rate of only 1.8 percent. That is right, 1.8 percent. Not the greatest number when our economy has is experiencing the largest stimulative fiscal and monetary policy in history. I think the latest reading could be a warning sign of things to come - a double dip recession. I expect to also see the summer doldrums take effect over the next few months. The old Wall Street adage that I have mentioned over the past several weeks, "sell in May and go away" has already taken effect. If the seasonal trend lives up to its historical billing we could see prosperous times for those of you who choose to use option premium strategies.
Why? Because a steady decline should bring fear back into the market which will increase the implied volatility in the VIX. This will create better opportunities for premium sellers and their options strategies. I, for one, am look forward to the opportunity to sell some premium this summer using a few of Terry's options strategies.
All of the major index ETFs are in a neutral state so there is no real short-term edge at the moment.
However, I did come across an interesting stat from Jason Goepfert regarding the performance of the S&P after the May Nonfarm Payroll report. Jason states "..the S&P closed in positive territory 10 out of 14 years with an average of +0.5%. Monday, however, was positive only 4 times out of the 14.
In fact, the whole next week tended to be kind of a dud. It was positive only 28% of the time, with a median return of -1.0% and an average maximum loss (-2.2%) much greater than the average maximum gain (+0.8%). The most positive out of all of them was last year, when it happened to coincide with the recovery from the Flash Crash."
With that being said, I think next week we could see more selling. At least to the point to where the enormous gap from April 20th closes in the S&P 500 (SPY). For the gap to close SPY would need to decline to the $131.35 level or a loss of 2.1 percent. I would not be surprised to see this type of move early next week.
Andy
"I've got a unit of the shoot portfolio. I'm very happy with the way it has performed, and I have set up a couple of my own using that model and those are also doing decently. Have you thought about adding more Shoot stocks? This is a winning strategy you should really be proud of and I would welcome the chance to participate in additional positions." - Eugene