Random Walk Trading.com
Thursday
May 07, 2015
1-855-RWT-0008
Prepared by the good people at Random Walk, LLC.
Closing Prices From Yesterday
CNBC Survey:
According to a CNBC survey,
“63% of millionaires surveyed say they’re one stock market crash or lose job away from losing their lifestyle”.
POT – The new webinar platform worked without a hitch. People report it was easy to use, the sound and visual quality were perfect, and there were no disconnects. Good Bye Gather Place
Have a great day!
Below are the major stocks reporting earnings
68% of companies have beat so far
1–855–798–0008
Legging Mini Class ONLINE.
So you are intrigued by the Legging Mini-class? You should be.
This class is being taught by Scott who explains in as much detail as possible HIS modus operandi of taking a leg. Obviously legging is more of art than science; however, this class will try to quantify and qualify the process as much as can be done.
Some items being discussed are:
- Initiation points of entering and exiting a leg
- What to do when a leg goes wrong
- Taking a naked option and spreading it into a vertical
- Choosing when to go with and when to fight the trend.
- Best times of day to leg
- Blending the leg into an existing portfolio, etc.
You will receive: Participation in the online class, a recording of the event for 6-months to review, all slides, etc
Enroll fast as this will be sold out.
1-855-RWT-0008
Today’s Number(s)
Yesterday and Today
Yesterday
Another day of opening near unchanged and falling quickly as bonds fell. This time Janet Yell was the cause of chaos.
The Federal Reserve Chairman stated yesterday “High equity valuations could pose potential dangers”. Maybe she is right, but I recall other Fed Chairman being WAY wrong on their stock market analysis.
Greenspan
December 5, 1996 – two days before Pearl Harbor Day.
Alan Greenspan started to talk about “Irrational exuberance” when the NDX was at 800 and the Dow closed at 6,400ish. He repeated the same speech for several years until finally right. But had you gotten out you would have missed riding the market up to Dow 11,700, or about 5,300 points. That comes to be 82% you would have made in 3 years. And if you knew how to hedge….well, I wont beat a dead horse.
The Nasdaq went up even more It went from 836 to 4816 in three years, about 478% profit. Yes it fell like a rock after that, but if you were hedged….never mind.
Ben Bernanke
May 17, 2007. With the SPX nearing 1,600 and the Dow at 13,400 spoke about the sub-prime mess saying that he had it “largely contained”. It was as contained as a thin back full of pissed of Honey Badgers. Less than 5 months later the banks blew up because of the sub-prime and the markets fell like a rock. The world’s foremost authority on the Great Depression was sitting on a complete financial system meltdown and didn’t see it.
Janet Yellen
May 6, 2015
On the anniversary of the flash crash, and during a collapsing bond market, Janet Yellen decides to twist the dragon’s tail and announce equity prices are overdone. It did have the effect that one would guess. We saw bonds fall like a rock (again) and the stock market go with it.
Keep in mind that on July 17th, 2014 Yellen stated, “Valuation metrics in some sectors do appear substantially stretched–particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year.”
That day (July 17th, 2014) the IBB (iShares Biotech ETF) closed at 250.39). Yesterday it closed at $340.72, up 36.1% in 11 months. This blows away any other segment of the market. And even though many/most of the social media stocks have been beaten down by 25% this last week, many are still priced above where they were when the statement was made.
TODAY
The above material in the “Yesterday” section was NOT meant to be a slight towards any of the previous Fed officials. The material was written merely to illustrate how foolish it is to listen to anyone (myself included) when talking about the stock market, and where it is going. Though I am willing to bet anything I am five times more accurate than any of them, and I don’t have any secret files, a secret handshake, a limo driven by the Secret Service, and $200,000 speaking fees. LOL.
Had anyone gotten out of the markets at the time Yellen said to sell Biotech, or Greenspan pontificated about how the world was coming to an end in 1996, they would have missed some great bull runs. The key is to be HEDGED because no one knows when it is coming to an end. Ben Bernanke was the only one not doing his Henny Penny act, and was claiming the world down when he should have been pointing towards the fire exits. He told everyone things were safe right before the Dow was cut in half.
If Yellen says we are overpriced, then we are overpriced, and about to become another 36% more overpriced than overpriced. How is that? Excuse me for sounding crass. I will say it in terms sounding more cerebral as that bestows more weight and validity.
Today
Utilizing the Gordon Growth model is antiquated when viewing this current market’s low interest rate environment. One must defer to the more appropriate Sum of Perpetuities Method (SPM) equation when determining the correct theoretical value in congruence with the Walter model for determining the present value of today’s market giving a semi-predictable dividend stream, but not throwing out the benefit low dividend growth stocks augment to the forward looking free market place. Given careful consideration of current valuations and average EBIDA in an uncertain tax environment, it is safe to say that the current market is slightly overvalued, but not so overvalued to the point where one doesn’t want to go BALLS OUT LONG (provided you are hedged). I now have a few moments to take questions.
Want to scare the markets? Tell the markets you are long 42 million bond contracts that have been in a free fall for a month.
POT is held each Wednesday night at 7:00pm eastern.
POT CLASS LAST NIGHT
It was awesome and refreshing to have clear video, audio and no disconnects.
I am glad we tried it before Saturday’s Legging Class.
Contract the office at 1- 855 – RWT – 0008 for more details.
Too True To Be Funny
Question: What do these 10 cities with the highest taxes ALL have in common? I am not going to say it as people will think I am being political. Which I am. Give you a hint. It starts with a “D”, as in “delinquent” in paying their bills.
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Baltimore
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Detroit, Michigan
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Los Angeles, California
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New York, N.Y.
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Newark, N.J.
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Chicago, Illinois
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Louisville, KY
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Columbus, Ohio
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Philadelphia, PA.
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Bridgeport, Conn.
Chicago is the highest when you factor in the largest cigarette tax of any city ($7.17 per pack), liqueur tax, tax on sugar, toll booths every 15 feet, dine-in tax at the drive through windows, red-light cameras that take EVERYONE’S picture (even if the light is green), 9.25% sales tax, $0.60 per gallon gas tax (only Honolulu has higher gas prices), city sticker tax, bottled water tax, motor vehicle lessor tax, new tire tax, telecommunication tax, etc.
Good luck on that $100 billion you need, Mr. Emanuel. Try to take this problem and make it an opportunity. You have tapped out everyone who voted for you, and now the state of Illinois doesn’t even want to help you.
“You never let a serious crisis go to waste” – Rahm Emanuel
Attorney Stuff
DISCLAIMER (Seriously!) All data above is provided for informational purposes only. Random Walk makes no guarantee as to the accuracy of the data.
Trading is almost as much fun as black jack in Vegas, but without all the annoying distractions of free drinks, Broadway shows, gorgeous people with low morals, and free buffets. It also has about the same odds of success, so when you lose all your money you wont have to walk past a smiling pit boss. Even Bruce Wayne lost everything with options in The Dark Knight Rises, and Superman keeps his day job at the Daily Planet newspaper.
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