What a week in Texas. I am sure the news painted the picture that Texas is now a Third world Count. I am here to say we are #TexasStrong and will recover faster than most. Read about my story below. Now to the markets.
- The market lost 0.7% last week. The first loss in three weeks.
- Corporate Earnings finished mostly positive.
- Over the entire U. S. the coronavirus is falling to levels we have not seen in a year. The vaccine is rolling out, slowly.
- I saw my first recommendation of a travel related stock this morning.
We also have a huge stimulus package that could get passed to add more fuel to the market fire. So is this blip an indication or just a small pullback to take advantage of.
Here at the Options Edge, we try to look at fundamentals of companies and trade off technical setups. We usually do not trade the high-flying growth stocks but look for ways to enhance our return using options.
So, is there a reset coming or not? That is the big questions everyone is talking about. Inflation could take off and interest rates will increase, and the market will react. If you are losing sleep at night, look at your portfolio and make some conservative adjustments. Keep tabs on the Options Trades that Mark Guthner writes about. Catch Mike Khouw, live, on Options Action on CNBC Fridays.
Happy Monday. Good Luck out there this week.
Global Spotlight
An Iranian threat to stop snap nuclear inspections by the International Atomic Energy Agency. Tehran informed the IAEA on Feb. 15 that on Feb. 23 it will stop honoring a key voluntary transparency measure written into the 2015 Joint Comprehensive Plan of Action.
EU foreign ministers meet to consider Russia sanctions. The EU Foreign Affairs Council will convene Feb. 22 to discuss a variety of topics, most notably possible sanctions on Russia related to its recent jailing of opposition leader Alexei Navalny and its crackdown on subsequent mass protests.
South Africa’s new budget. South African Finance Minister Tito Mboweni is scheduled to unveil South Africa’s 2021-22 budget in a Feb. 24 speech. The closely watched budget will give another indication of how hard the COVID-19 pandemic — and the concerning South African variant of COVID-19 — is affecting Pretoria’s already-battered finances and South Africa’s economy.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Juan Luque from Incline’s trading desk provides a helpful interpretation of the sector moves.
The S&P 500 finished the week down for the first time in three weeks. The Energy sector was up 4.5% followed by the Financials sector at 3.78%. Both sectors continue moving along the leading quadrant. Materials and industrials were also up 1.92% and 1.42% respectively. The remaining sectors posted losses for the week. The Utilities sector was the worst performer this week posting -2.76% weekly loss and remains in the lagging quadrant. The second and final sector in the lagging quadrant is the Consumer Staples which was down almost 1% for the week.
Of note
I survived the Texas Blizzard. Texans do not know how to live in the cold. We have a lot of energy and a lot of potential to keep the place warm. When it gets to cold, the state can stop working and that is exactly what happened last week.
To give you perspective of Texas Weather, the week before I was sitting outside, sipping a cold Shiner Bock, and listening to the sounds of Spring. It was 75 degrees outside. We all knew something was coming. Despite the delay in quantum computing, weather forecasting has become reliable. I think most of Texas thought that it was not going to be that bad. Well not as bad as the Covid-19 lock downs. I mean there was stuff on the shelves at the store.
Friday Feb 12, 2021, things started to get colder and it went down hill from there. When it gets cold in other states, things are fine. When it gets cold in Texas, things break.
Texans spent the first day it snowed gawking at the sight that made no sense. Afraid to venture out of the house.
Texans on the second day realized something was wrong, the snow did not melt. And after some brutal cold nights, power began to shut down and water stopped flowing.
Crews could not get out to repair things until it was things got better, but they did not get better.
I am sure you read the news about how things fell apart, but as a lifelong Texan, I can speak to most of us, we were prepared. I knew it would get warmer. I Knew power would come back. I knew water was plentiful. So, I waited and helped with what I could do.
So why am I telling you this in a trading blog?
As in any situation, especially trading, always be prepared to what could happen. I was in a good situation because I was hedged. Just like when I trade, I always think of what could go wrong and how to protect what I have.
Use the Options Edge to keep you safe. If the markets reset, our accounts will be fine.
If you find this post helpful, please pass along to the investment community. If you would like to see any additional information, drop us a line and let us know.
