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Two new trade ideas for down markets

Jul 14, 2022

Good morning!

‍Futures are down yet again as I type.

3600 is now in sight.

Not that this is a surprise, at least to us anyway. I sent you the following chart on June 29, 2022, in that morning’s 5 with Fitz.

“Failure to hold 3800 means a retest of 3636.87,” I noted along with the following chart to illustrate my point.

Here's my playbook.

Banks blow it

JPMorgan Chase earnings got hammered to the tune of 28% after booking a $428 million charge for bad loans and suspending buybacks.

Morgan Stanley reported losses as well, hurt by weaker than expected investment banking revenue.

Shares of both are down.

No word – yet - on Jamie Dimon’s “economic hurricane” but it would appear that my concerns were well founded when I voiced that to Fox Business anchor extraordinaire Stuart Varney on Monday. (Watch)

I hope I’m smart enough to buy more shares.

NO such thing as coincidence: TWTR

Reports are flying about outages that began at 1245BST/0745EST but has apparently since been resolved.

According to Down Detector, a website monitoring tool for this kind of stuff, 57% of users reported problems with the app while 6% reportedly cannot post. (Read)

Meanwhile, shares of Twitter jumped 7% yesterday as a noted short-seller Hindenburg Research took a long position on the assumption that the courts will force Musk to make good on his deal to buy Twitter at $54.20.

Why should they have all the fun?

State of Play: I might have to take another swing just for kicks, probably using married puts or something similar to maximize profits and mitigate risk to the extent possible.

Never fear another bear market again

Hedging is easier than you’d think and more critical than ever before. In fact, I believe anybody with half a brain and 5 minutes can do it. So, get Your 5 Minute Guide to Hedging right now and get busy. Or hold your peace if the selling continues.

BTW, I originally published this guide the last week of May when the S&P 500 was 11% higher than it is today.

Think about how different your portfolio could look and what a different experience you’d be having right now had you acted.

It’s not too late, but the window is closing quickly.

‘Nuff said.

Netflix + MSFT = Unlikely bedfellows

Netflix and Microsoft have teamed up for an ad-supported (read: lower cost to consumers) subscription after resisting the move for years. (Read)

Netflix is still a dog.

Netflix is widely expected to lose 2 million subscribers when it reports but I think the figure could be higher. Customers are growing tired of higher prices and there’s plenty of competition.

Microsoft is the clear winner here because the company’s advertising division makes up at 6% of total revenues.

Trade ideas: 1) Short the former, long the later in a move known as a “pairs trade” or 2) Purchase a calendar spread that will capitalize on Netflix between roughly $133 and $196 within the next 8 days, a move I recommended on July 5th to Trade with Keith subscribers.

Buy at the flick of a wrist

Forget swiping your phone or tapping your credit card. A few years from now the move will be simply waving your hand.

Biometric devices are a much bigger deal than people think. (Read)

We’re already there with voice, fingerprint and facial recognition technology at banks, airports and even tech companies. Super-secret James Bond-like facilities reportedly routinely use optical scanners.

There are growing pains, pun intended.

Walletmor, a British company that claims to be the first selling implantable contactless bank-card chips, has had the plug pulled by its partner Mastercard, who apparently wasn’t happy their chips were being put in people. (Read)

It’s too early to pick winners here unless you’re way upstream with the likes of payment providers like Visa or ecosphere monsters like Apple.

But the day IS coming.

Psst, Apple will pay you $2 million to hunt bugs

Fancy a quick $2 million?

That’s what Apple’s willing to pay hackers finding bugs in the company’s new Lockdown Mode. (Read)

This kind of bounty is increasingly normal. It’s also a boon for so-called “ethical hackers” who make a very healthy living by finding critical security weaknesses for pay. Facebook, Google, Apple, Microsoft and hundreds of other top-tier companies do not hesitate to pay up.