The Stock Market - A daily diary

On what thing? QQQ?  Same way -- the calls and puts.  Is that what you are asking?

No way man.  Just read a little about it.  and I still know NOTHING about it.  too many “sectors”.  I can’t even entertain the fact of knowing one company lol.  Let alone a bunch of them all in one ETF.  Remember I’m new to this.  I’m learning what NOT to do in stocks101 class from you guys.  ETFs are for next semester.  Hehe.  Man these guys are lovin gold and silver this is only the beginning in their opinions.  which I had some extra scratch to put down on some calls later this fall.  but I cannot get away from this APT.  it’s kind of an obsession.  how do they not blow their earningsQ2 out of the water in hopefully less than a month ?  

QQQ trades options as well.  They trade just like options on stocks, etc.

Did the computers wake up and realize that the markets were overpriced in the middle of the day? 

California is rolling back  a lot of the reopenings.  That turned things around today.  Will be interesting to see if there is any follow through tomorrow on the selling.   How a stock like DIS only losing a couple percent is beyond me.  I don't see how they can really reopen Disneyland & Disneyworld... Still wayyy too much complacency out there  across the whole market IMHO. 

The entire set up for the airlines, adventure/theme parks, cruises and casinos has looked horrible for months. Disney sits roughly 20% off of its pre-covid high. You would think that's a big chunk of the stock price right? CCL is still down 71% from pre-covid! 

Forget the fact that Americans are by far the worst at handling C19 than any other country. Americans have disrespected the potential of this disease more than any other. If you open Disney, Americans are going to pack the parks. It's insane but look at the beaches over the 4th...slammed packed with C19 spreading as fast as the snow-cones are melting. BUT. The key point to understand is that the timing of C19 is finite. The virus will either be beaten via vaccine or by herd immunity. 

These stocks become very interesting as vaccine news hits the wire.

I liked what guy adami said an hour ago on fast money.  all this talk about pfizer and moderna and other pharmaceuticals going up today on positive vaccine news.  BUT they won’t get to the finish line in the end regarding the cure.  it’s going to be a company that we haven’t heard of that’s gonna be the big payday

Yeah... I think there are around 20 or so companies that are working on the vaccine.  It also wouldn't surprise me if more than one vaccine was approved for use.  U.S. for its people, Europe for its people, etc.  You can bet China isn't sharing what they develop, nor would we want to take it anyway !!  

We are a little over 2 weeks away from when enhanced unemployment benefits run out.  The House has already passed their (pet project) bill, and the Senate is working on a smaller, more targeted bill that will help those unemployed.  Will they both get their act together and pass one bill ?!  The market won't like it if we are in the same place 2 weeks from now.  

Well, the selling sure was short-lived .  Lol.  It's almost as though the rollbacks in CA don't matter.  It seems all that matters is the continued support from the Federal Reserve, and another $1T+ stimulus from the Federal Government (?) 

But what's interesting about this "recovery" today from the March lows is that it has elements from the 2009 March Low (unprecedented Fed Reserve support again), and 2001 (bubblicious tech stock valuations).  Day trading today seems to be in vogue  again like it was during the tech stock bubble.  Witness a stock like TSLA that has become (further) unhinged from fundamentals.  I just read somewhere that it is worth more than Toyota, Honda, and Ford... COMBINED.  That is nuts.  What will be the catalyst that changes the trajectory of the market overall ?  

Do you want the trajectory to change?  Or you are assuming it will? I do not understand what you mean. 

You mentioned QQQ some time ago.  Just read that there’s  13,000 8/21 $200 puts trading at $1.26.  This things at 260 now.  What the hell are they thinking ?  

Yes. I have been playing QQQs for the last few days. 

Today was a more or less down day compared to the last week or so — which was sort of expected.  

That is why the 200s look like that.

Yes. The 200s are one of the most actively traded ones.  But look at what they were trading at a week ago or a month ago.  

You’d half to tell me.  I’m only paying attention to Netflix right now.  And I’m getting burned because I’m the loser who bought calls at the top on Monday.  Bought one call at $610 when the stock was at 575ish.  Expires this Friday.   MASSIVE sell off yesterday and today it hit 491 before it closed down .62 cents or something.   So we had a good push back.  But my god.  Earnings this Thursday after market close.  how won’t it be good with all the quarantines since mid March ?   Just makes zero sense to me... among everything else.  all this vaccine moderna news making me laugh.  

Point was simply that they are way down. So, naturally there is some interest in them now. 

More assuming it will, Raiders... The disconnect between main street and wall street continues to expand,  like a stretched rubber band that will eventually break.  I am not doing anything differently w the portfolio,  aside from having some dry powder available. 

Ready to fire at the right opportunity.  

I noted that Mohammed El-Erian just wrote a piece that covered some of the points we've been going over recently,  even referencing  a " new generation"  of traders (i.e. day traders), and he even referenced keeping some dry powder  !.  That's my line. Lol 

Excerpt here; 

“Rather than buying assets at valuations stunningly decoupled from underlying corporate and economic fundamentals, investors should think a lot more about the recovery value of their assets,” he said, pointing to a “new generation” of traders pushing stocks relentlessly higher. “The sense that the worst did not come to pass has fed complacency among investors of all stripes.”

While retail investors continue with the risk-on attitude, El-Erian says the smart money has been raising cash in hopes of putting a “dual investment strategy” to work — this includes keeping some powder dry for rock-solid companies to correct to bargain prices as well as being ready to step up with “well-structured rescue financing” when bankrupt companies look to reorganize and recover.

https://www.marketwatch.com/story/its-time-for-investors-to-stop-buying-stocks-that-are-stunningly-decoupled-from-reality-economist-warns-2020-07-14

I know you say you don’t like to read too much.  But read some good articles on that the other day.  I will summarize the one guy’s main points:

1. Economic data looks at the past but the market looks to the future

2. The market hates uncertainty more than awful news

3. Low bond yields make it harder to avoid investing in shares

3. Low bond yields make it harder to avoid investing in shares

4. The next year of corporate profits doesn’t matter that much

5. Monetary and fiscal policy measures

Highlights from another:

Another guy goes into detail about even if unemployment reaches 20%, then 80% are still working.

The folks that got laid off are not your typical investors.  The whole system is set up to get people to get into stocks and stay in them.

It takes prolonged pain to change human action and coronavirus has not been long or painful enough.

Both made great points.  But I think most investors are really smart folks.  I think a lot of people overlook the fact that this pandemic has not been nearly as bad as was said to be by the media, etc.  Smart investors realize this and saw some stocks on sale.  These folks realize a shutdown was overreaction.  They also see the sudden swing from reporting deaths to reporting cases as deceptive.  This would not deter a savvy investor.  Especially, if he knows a virus will not be forever — even if it were as serious as they first thought.   They see us coming out of this soon and doing well.  Maybe this new ‘panic’ slows it down some.  Maybe then we can get some more stocks on sale.

  Makes some good points.  Not sure I agree about the ‘new trader’ part. Or maybe not sure how much that plays into it.  The aggressive part I think could be deemed more overconfidence. 

But I do like the dry-powder term.  

Hey Raiders.. it's interesting to say the least.   Like you, I question just how much the "Robinhood" trading  community has played into the rally, but they have unquestionably played  a contributing role in the market advance.

This article was one of the feature articles on the Motley Fool just yesterday.   

www.fool.com/investing/2020/07/14/5-awful-stocks-robinhood-investors-are-buying.aspx

I have 200K burning a hole in my pocket. WMT got away from me and I'm just waiting.....and waiting. 

Rush...give me a few winners. What you got?

Gamble... nothing right now.  All I can preach is patience. 

Heck, I bought FB  and GOOGL years ago, and wished I bought just a little more of each.   I never thought I'd be able to buy any more at reasonable prices,  then the pandemic gave me that opportunity. 

I've been watching WMT closely ever since they introduced Walmart + .  Wallstreet is in love w them right now.  E- commerce is a growth vehicle in the investment community eyes, and they are looked at as a defensive play w their grocery business.   This stock has really taken off in the last 2 weeks of trading

We can only hope for pullbacks to bring opportunities like this in.