I agree there are plenty of red flags and situations that could crater things. I just don't think any of them will happen until the fall making summer a sideways market with potential to grind either direction. With the feds current policies I think we grind sideways to up until election/fall covid concerns and then all bets are off.

This has a 0% chance of happening and a 0% chance of impacting the market if it did. I mean, lol? Have Trump Derangement Syndrome in your personal life if you want - Emannuel Goldstein is a literary character for a reason, low IQ people need something to hate to make sense of the world - but don't let it encroach on your trading.

The most likely Trump-related impact on the market is if Democrats win and small business confidence erodes (Trump ripped it to 10 year highs when he got into office and it stayed there).

I also don't agree that second lockdown is a lock. It may be probable, but not a lock.

Agree with the rest, tens of millions of retails pouring money into the market daily, often a lot of it, make the market very frothy and reality-disconnected. Plus the lock of economic damage propagating, means it's pretty silly to hold long rather than merely speculate long.

Is there any data/articles out there that says retail $ is moving the market? I have a friend that works at Schwab and he did say April was 1 of their busiest months for new accounts (combo of people being home + having $ to trade + wanting to buy lows) but does this really move markets when we're talking 20-30 trillion in market cap?

1.) I didn't say there would be a lockdown, I said that a second wave is a lock.

2.) You're off your rocker on Trump. If he loses the election I think he'll ultimately leave office one way or the other, but I don't think he'll go quietly. If you see a 0% chance of him doing anything other than graciously agreeing to leave office if he gets voted out, then you're the one that's being delusional here, not me. And saying that a hypothetical constitutional crisis would have a 0% chance of moving the market is ******ed.

3.) I agree that if Biden wins the market could certainly tank. But I think you are wrong about why. Right now from a game theory perspective it is in everyone's interest to cooperate on economic stimulus / enhanced unemployment benefits, because everyone wants to get reelected.

If Trump loses, at an absolute minimum he will do everything possible from the day after the election to the day that Biden takes office to sabotage the recovery. He's been diagnosed as a malignant narcissist, you can read about how those people behave and view the world on your own time, but we're not looking at a George W Bush to Obama transition here.

Secondly, if the Republicans retain the Senate but the Democrats take the House and the Presidency, why are the Republicans motivated from a game theory perspective to help the Democrats govern? They will want to retake power in 2024 - does a roaring economy help them do that?

And onlydo2days, check out Robintrack.net

Somehow managed to make through the day with only a scrape. I had some naked calls in the indexes that I turned in to free spreads. Another day/week like this won't be so kind

Also bought some VXX calls for Sept. If they spike early I'll probably turn them in to free spreads or lock in a profit. ATH are in reach here. I think it's going to be hard to push much above ATH and the risk/reward to the downside should be pretty nice. I still think the market cant hold up til late july/aug so I'm sticking with longer dated stuff while also trying to keep some theta and shorted dated options to help with any sideways action/decay

A move down to 2900 in the shorter term would be delicious. thoughts and prayers

Has your view on EURN and STNG changed at all? Or still holding long term?


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the thing is the tail risks are getting fat as fk, u got covid not going away and fall coming exacerbating it and second waves already happening in some regions, then china **** and how they gonna play it because it for sure is escalating only matter of timeline, then disruptions in travel lasting for a long **** time hurting all kinds of ****, then riots in america/hk, unemployment, social fear, debts coming due in whatever months/year are, etc etc... Only thing is elections is percieved to be of importance and sure they are doing some things to keep it all together till then at least and will keep trying but there could be a trigger before that. Then u got a 2000 tech-like bubble in some parts of tech, going on for quite some time now.. Then all that matters is when it all pops but i dont see how its not almost a given it will do so. Really the patience required to wait for the right moment and go all in in puts is killing me

Wall of Worry

Quote:

Wall of worry is the financial markets' periodic tendency to surmount a host of negative factors and keep ascending. Wall of worry is generally used in connection with the stock markets, referring to their resilience when running into a temporary stumbling block, rather than a permanent impediment to a market advance.

Unbelievable that a rally this strong could seemingly bum so many people out. That is a good thing though I guess

I'm new to options and am curious if anyone has thoughts regarding this options play. So, around the start of the pandemic, I bought ~50 shares of Kroger (KR) stock and have been following the stock pretty closely ever since as I continue to hold. Their earnings report is going to be released on 6/18, I think pre market close. Pretty much without a doubt, the report is going to be very strong and is likely to crush previous years' equivalent quarters. I've been following a lot of companies as they report and the majority of those whose reports seem at all any good have been enjoying some huge spikes, as have a bunch of companies with crappy earnings. There's been a loose formula of ER=big spike, obviously with some exceptions.

Anyways, between this week and last week I bought a lot of calls for strike price 32 and even more at strike price 35, expiry 6/19, the day after earnings. My thesis is as follows: I believe KR is the rare stock that will go up under the majority of circumstances heading to that date. If the market keeps going up, it will continue follow it at a slower rate. If the market goes down, it will likely be under circumstances that will drive investors into the stock, .e.g., any threat of a second lockdown. In any event, I expect the earnings report to be so juicy it should enjoy a nice big spike. While this was priced in to some extent in March, I think it still has a ton of room to jump.

I felt even better about this play when I checked yesterday and the call : put ratio was something like 4.5:1. I also learned yesterday that there was decent flow into the 33 call strike price.

Then, today, I saw that a huge amount of puts, over 5k apiece (massive given the relatively low amount of interest in the stock prior), were bought for 6/19 at strikes 30 and 35. The call : put ratio is suddenly about even. WTF. I can't find any information as to why people would expect the stock to take a hit despite what is going to be a crazy ER. There hasn't been any negative news that I can find. It's possible people are convinced it has an inverse relationship to the market, but that hasn't really been the case. Yeah, it has lagged behind the market, but the correlation isn't as strong as you might think.

Anyways, as a newb I am curious what people more experienced with options and the market think. The 32c are already showing a profit and the 35c are close to breakeven. I feel like it's a great spot, but with my inexperience I don't know whether I should be worried about the huge amount of puts bought today out of nowhere. I was planning on holding these until at least 50% profit (and even then holding the majority hoping for 200+%) but am now a bit spooked.

Any help would be appreciated, even if it's just someone pointing me to any information about where the huge amount of puts came from or why.

Personally if you are up on either of the 2 calls, but especially the one at $35 I would sell just prior to earnings. This is considering that $35 is close to their ATH. I'd say it's pretty optimistic it will shoot much further beyond that within your time frame.

Earnings plays imo are mostly a coin flip regardless of the actual results of the earnings call and a lot of it gets priced in prior anyways.

If you look at the last 1 that KR had they ran up prior to earnings and dropped immediately afterwards and the one before that they ran up 1 day after trading flat and dropped afterwards.

I think you get most of your value prior due to the IV. Post earnings the drop in IV and the theta decay will eat up your profit. Just my 2 cents, but I always sell earlier rather than later.

The biggest risk I see "to America" as a result of the election is Trump winning narrowly and controversially (probably redundant) while coinciding with more lockdowns as a result of a second wave. This isn't a favorite but it certainly is more than a minuscule possibility, and maybe that intergenerational tension that is merely simmering now (but arguably underlies some of the current protesting) really boils over.

"Be greedy when others are fearful and be fearful when others are greedy" is a pretty good maxim my brother. But if you wanna keep riding this wave then best of luck to you.

It's not clear at all to me that if Trump loses in an election he will just graciously acquiesce.

I personally think there is at least some risk of something really violent happening around the election or in the immediate aftermath, particularly if Trump alleges election fraud (which he is already setting the stage for) and refuses to concede. I'm not saying that's the most likely outcome but I think it's definitely a risk. Just look at all the rioting and all of the gun sales this last week... unemployment, divisive politics, a global pandemic and an economic depression are a very volatile combination.

I've been kind of trading in and out of this position. I don't really buy the oil storage thesis anymore so I've been kind of opportunistically selling spikes and buying dips, but I do believe in the long term order book thesis (particularly with STNG). I also like the yield that EURN and DHT are paying - these companies are gonna make a lot of money in Q2 and should continue to do reasonably well for the foreseeable future. I think you can do a lot worse than just hold them and collect their dividends to be honest with the knowledge that they will almost certainly be materially higher a couple years from now as a result of an aging VLCC fleet and a low orderbook for replacements - that's a very bullish LT setup. But what happens in the intermediate term is anyone's guess, and I've pared back my position pretty substantially and taken some losses on a couple of names.

I do think STNG has a ton of upside over the next few years and I love that their CEO was willing to buy a couple million in calls on his own stock because he believes in his Company. That's the kind of guy you want to bet on IMO. I would recommend listening to the interview with him that was done by Mariusz Skonieczny, it's very much worth the listen. It's also going to be very interesting to see what happens with the sanctions that the US is threatening against tanker companies that have been transporting to and from Venezuela, that could be a very bullish catalyst in the short term.

Also I've done a complete 180 on J Hannisdahl on Twitter, I used to think he's an idiot but I now think he's been pretty much right on with his calls and he is very much worth the follow. The other guy that I really like following is JimmyWar77, he seems to really know what he's talking about. I would ignore most of the rest of what you read on Twitter, they're all guys with confirmation bias who have lost all objectivity.

I think Twitter encourages bias from the follower model. A bit like how on-demand news works now and sent the news organizations comically biased. Personally I don't listen to anyone and just use Twitter for data and breaking news.

Thank you for the update.

I like the low order book thesis as well (long-term), and it seems the sanctions could definitely pop the rates (and stocks) short-term.

I still see very little downside as a place to keep your money right now, with potential for them to shoot up.

My main problem is that I’m scared to death to keep any money in equities right now because of what’s maybe an inevitable pullback. But I don’t really know how a 10% pullback (or more) of say the S&P will affect the tanker equities short-term. In theory I don’t think it should matter to them at all, but that doesn’t mean they won’t be affected to some degree.


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What evidence can you point to that makes you draw this uncertainty about Trump leaving office?

Because as far as I can tell there is a group of people who have attempted to undermine the 2016 election results for 4 years, and it's not Trump supporters.

You could have posted this exact same comment at SPY 285.
Good luck.

Appreciate the thoughts. I'll definitely consider selling a decent chunk if not all in the days just prior to the ER, as I've noticed a lot of these get their big spike the day of ER and then can go south quickly thereafter (PRPL recently comes to mind, just one example but I remember it hitting as high as ~16.5 during AH as the ER was announced and by the next day despite the stellar ER it was back down to the 12s iirc and less than where it had ended at 4 PM heading into the ER).

yes anyone who thinks republicans would have been fine with all the (necessary and good!) unemployment benefits/PPP loan programs/etc under Obama is completely delusional. they won't be fine with them under Biden either. expect to see some horrifically comical bad faith concern trolling about deficits and the need for the average american worker to take their medicine if Biden gets elected and we have another outbreak or economic crisis. of course we live in different epistemological universes now so i'm sure the usual suspects will post about why actually senator vanderbilt III-populist firebrand- is correct to say that we don't have the money anymore to give checks to unemployed people and it's time to be responsible and run the budget like a household. it will be gag inducing

The day was ending in a serenity of still and exquisite brilliance. The S&P shone pacifically; the NASDAQ, without a speck, was a benign immensity of unstained light; the DOW was like a gauzy and radiant fabric, hung from the wooded rises inland, and draping the low shores in diaphanous folds. Only the gloom to the west, brooding over the upper reaches, became more sombre every minute, as if angered by the approach of the opening bell.

And at last, in its curved and imperceptible fall, the market sank low, and from glowing green changed to a dull red without rays and without heat, as if about to go out suddenly, stricken to death by the touch of that gloom brooding over a crowd of men.

Forthwith a change came over the traders, and the serenity became less brilliant but more profound. The old Fed in its broad reach rested unruffled at the decline of day, after ages of good service done to the race that staffed its banks, spread out in the tranquil dignity of a money printer leading to the uttermost ends of the earth. We looked at the venerable Fed not in the vivid flush of a short day that comes and departs for ever, but in the august light of abiding memories. And indeed nothing is easier for a man who has, as the phrase goes, “followed the trend” with reverence and affection, than to evoke the great spirit of the past upon the lower reaches of the Thames.

https://twitter.com/washingtonpost/s...140378624?s=12

This going to drop the market tomorrow?


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With all the analysis that the job survey gets immediately after it comes out I would have my doubts that this article has an impact, it is old news. Barrons has a good breakdown of the report if interested.

Market leveled off later in the day, treasuries stabilized so perhaps in part due to enthusiasm being tempered. Market is probably due for a pull back. We’ll see.

How was it surprising that reopened businesses needed staff in the first place?

Like any other crisis, the ripples will take months to play out.