Stock Market Prediction

[mikesal57]

Originally Posted by highernote

I hope the following is helpful:

I don't know if we are at the bottom of the covid crises, but there are some positive signs on the horizon. This video gave me a lot of reasons to believe we are almost through the worst of the crisis:

"NYC FRONT LINES DOCTOR EXPLAINS HOW EASY IT IS TO NOT GET INFECTED AND STOP THE SPREAD OF COVID-19": https://bit.ly/39m188U

This is a must watch video if you want to protect yourself from the virus. It's from a doctor who is treating covid patients in a NYC hospital.

But this thread is about the stock market and this video makes me think the market will be rebounding sooner than later.

I wrote software that scans all the listed options and the underlying common and then makes a list of good covered call candidates where you buy 100 shares of stock and sell 1 option. The minimum annualized return on investment of trades on the list is 40%.

On a typical day last year there might 30 to 50 candidates and most of those are not tradeable becuase they are too risky -- pending lawsuits or risky biotechs. But last week there were over 1,000 potential trades! That's because there is so much volatility which causes high option premiums. The last time I saw this was March of 2009. That was the bottom of the financial crisis.

I maintain a market timing model that was created by Martin Zweig. It has served me well. I sold everything back on February 26. I thought I would be out of the market for 18 months like I was when I sold everything in July of 2007 and didn't buy until March 2009.

So based on what the NYC doctor said, based on my Zweig timing model, and based on the number of stocks with high option premiums, I'm betting we are close to the bottom. (BUT I COULD BE WRONG!)

I figured it was time to get back in the market today so I looked at the ten stock recommendations yesterday from "The Motley Fool Stock Advisor" service. I noticed that of their ten recommendations four of them appeared on my list of covered call trades -- Zoom, Slack, The Trade Desk, and Luckin Coffee.

Luckin has dozens of class action lawsuits filed against it. So I won't touch that one.

Zoom and The Trade Desk are priced too high. I don't want to spend a lot of money on this market in case the market drops further. I want to be mostly in cash.

So today I bought shares of Slack @ $28.01 and sold April 17 calls with a strike price of $24 for $5.10. After fees, this trade should have an annualized rate of return of 64% if the stock trades at or above $24 on the expiration date. It can fall to $23.11 (18%) before the downside break-even point is reached.

If the stock falls below $23.11 I keep all the option premium, but lose on the stock. However, it's a stock I want to own long-term anyway so I don't mind if it falls below $23. I still have a cash on the sideline to make more trades if good ones appear.

I'll post a list of potential trades in the next hour or so for anyone who is interested.

Way over my head...but I like the thought

Here in NY , it looks like the End of Days are coming....not end of virus

[sammy the sage]

Originally Posted by highernote

I hope the following is helpful:

I don't know if we are at the bottom of the covid crises, but there are some positive signs on the horizon. This video gave me a lot of reasons to believe we are almost through the worst of the crisis:

"NYC FRONT LINES DOCTOR EXPLAINS HOW EASY IT IS TO NOT GET INFECTED AND STOP THE SPREAD OF COVID-19": https://bit.ly/39m188U

This is a must watch video if you want to protect yourself from the virus. It's from a doctor who is treating covid patients in a NYC hospital.

But this thread is about the stock market and this video makes me think the market will be rebounding sooner than later.

I wrote software that scans all the listed options and the underlying common and then makes a list of good covered call candidates where you buy 100 shares of stock and sell 1 option. The minimum annualized return on investment of trades on the list is 40%.

On a typical day last year there might 30 to 50 candidates and most of those are not tradeable becuase they are too risky -- pending lawsuits or risky biotechs. But last week there were over 1,000 potential trades! That's because there is so much volatility which causes high option premiums. The last time I saw this was March of 2009. That was the bottom of the financial crisis.

I maintain a market timing model that was created by Martin Zweig. It has served me well. I sold everything back on February 26. I thought I would be out of the market for 18 months like I was when I sold everything in July of 2007 and didn't buy until March 2009.

So based on what the NYC doctor said, based on my Zweig timing model, and based on the number of stocks with high option premiums, I'm betting we are close to the bottom. (BUT I COULD BE WRONG!)

I figured it was time to get back in the market today so I looked at the ten stock recommendations yesterday from "The Motley Fool Stock Advisor" service. I noticed that of their ten recommendations four of them appeared on my list of covered call trades -- Zoom, Slack, The Trade Desk, and Luckin Coffee.

Luckin has dozens of class action lawsuits filed against it. So I won't touch that one.

Zoom and The Trade Desk are priced too high. I don't want to spend a lot of money on this market in case the market drops further. I want to be mostly in cash.

So today I bought shares of Slack @ $28.01 and sold April 17 calls with a strike price of $24 for $5.10. After fees, this trade should have an annualized rate of return of 64% if the stock trades at or above $24 on the expiration date. It can fall to $23.11 (18%) before the downside break-even point is reached.

If the stock falls below $23.11 I keep all the option premium, but lose on the stock. However, it's a stock I want to own long-term anyway so I don't mind if it falls below $23. I still have a cash on the sideline to make more trades if good ones appear.

I'll post a list of potential trades in the next hour or so for anyone who is interested.

Like your posts...thoughts on how to do things...

[highernote]

Originally Posted by sammy the sage

Don't think the market has CV 19 fully baked in yet....

That's a million dollar question -- what will be the final impact of covid?

I don't know.

I do know that March 2019 looks similar to March 2009.

Profit is the reward for taking risk. A fool and his money are soon parted.

What advice should an investor follow?

---- edit ----

SP500 options expiring in June with a strike price of 3,200 are cheap -- about $3. Might be worth taking a flyer.

[FakeNameChanged]

Originally Posted by sammy the sage

Don't think the market has CV 19 fully baked in yet....the media SCARE tactics have REALLY ramped up more....and with Wal-mart starting to make ALL employees wear masks and temperature CHECKING EVERYONE....that's NEW...and will cause some downside...

I have been wrong before....

You may be right in your call on the CV 19 not fully baked in yet. But several of the Chinese companies are recovering and we are trailing them in the outbreak by 3-4 weeks(est). Our 24 hr. media coverage will delay it to some extent IMO, and I don't think it's intentional.

[thaskalos]

The Dow drops a thousand points in a day and the headlines read, "Stocks get hit hard amid worldwide Coronavirus concerns". The next day the Dow rises a thousand points and now the headlines read, "Stocks surge as federal stimulus package gets approved". The following day the Dow is again down 900 points and now..."Dow drops again as Coronavirus concerns intensify". And the next day as the Dow surges 950 points..."Stocks rally as President reassures nation".

And I've been ridiculing the commentary of the TVG hosts? I'll never make fun of Todd Schrupp ever again.

[ReplayRandall]

Originally Posted by sammy the sage

Like your posts...thoughts on how to do things...

He's been here before, Sammy...

[Ocala Mike]

Originally Posted by highernote

I do know that March 2019 looks similar to March 2009.

March 2019 looks similar to September 2018 to me.

[thaskalos]

Originally Posted by ReplayRandall

He's been here before, Sammy...

Doubtful...he is way too literate.

[chiguy]

I am no expert on this stuff but it would seem to be based on what I am seeing from Southern California, it will be a long time until people want to be in large groups such as sporting events, movies etc. That would leave me to believe that anything that supports work/entertainment at home would be a good bet.


I also saw something yesterday regarding drive-in theaters. They would be a pretty safe place right now right?

[PaceAdvantage]

Originally Posted by chiguy

I am no expert on this stuff but it would seem to be based on what I am seeing from Southern California, it will be a long time until people want to be in large groups such as sporting events, movies etc.

Spot on...people have no clue what is coming from all of this.

3.3M unemployed last week...that's chicken shit....

Never before in the history of the world have we almost entirely SHUT DOWN the ****ING ECONOMY.

And people still don't get me?

One day a lot of you will awaken from your slumber and say....HOLY ****ING SHITBALLS! LOOK WHAT WE'VE DONE!

[Saratoga_Mike]

Originally Posted by PaceAdvantage

Spot on...people have no clue what is coming from all of this.

3.3M unemployed last week...that's chicken shit....

Never before in the history of the world have we almost entirely SHUT DOWN the ****ING ECONOMY.

There are roughly 12.5 million restaurant jobs and a little over 15 million retail jobs. As of today, I'd bet 15 mm to 20 mm of those jobs are gone. And, as you know, it extends well beyond consumer-facing jobs. It's going to get ugly, indeed.

Last week's first-time weekly claims number was a little over 3 mm. For tomorrow, it's hard to envision a number below 5 mm, probably higher if all the claims are actually processed.

Once the virus has passed, there's a belief, among some, that you will just flip the economy back on, like a light switch. I suspect that thinking is totally wrong, but I hope I'm wrong.

MV=PQ or MV=GDP. M is up and headed higher, but V has been annihilated.

m=money supply
v=velocity of money (function of animal spirits)

[PaceAdvantage]

Originally Posted by Saratoga_Mike

There are roughly 12.5 million restaurant jobs and a little over 15 million retail jobs. As of today, I'd bet 15 mm to 20 mm of those jobs are gone. And, as you know, it extends well beyond consumer-facing jobs. It's going to get ugly, indeed.

Last week's first-time weekly claims number was a little over 3 mm. For tomorrow, it's hard to envision a number below 5 mm, probably higher if all the claims are actually processed.

Once the virus has passed, there's a belief, among some, that you will just flip the economy back on, like a light switch. I suspect that thinking is totally wrong, but I hope I'm wrong.

MV=PQ or MV=GDP. M is up and headed higher, but V has been annihilated.

m=money supply
v=velocity of money (function of animal spirits)

There are just going to be too many businesses that won't survive this...hope I'm wrong...but I don't see it...no way.

Like you said, people just think you can flip the switch on or off.

[Saratoga_Mike]

Originally Posted by PaceAdvantage

There are just going to be too many businesses that won't survive this...hope I'm wrong...but I don't see it...no way.

Like you said, people just think you can flip the switch on or off.

I really hope we're wrong, but I don't think we are

[ReplayRandall]

Originally Posted by thaskalos

Doubtful...he is way too literate.

Are you catching my "wrong" disease or something?....

The poster highernote used to be highnote with an avatar of a pig and over 10K posts...

Here's a typical post from him:

http://www.paceadvantage.com/forum/s...23&postcount=1

[thaskalos]

Originally Posted by ReplayRandall

Are you catching my "wrong" disease or something?....

The poster highernote used to be highnote with an avatar of a pig and over 10K posts...

Here's a typical post from him:

http://www.paceadvantage.com/forum/s...23&postcount=1

I see! Why isn't he using his previous name? Was he banned? Does he suffer from Multiple Personality Disorder?