Weekly Raid #60 - World at War edition
Good Morning Traders/Investors
Welcome back to another week of insanity here in the markets.
I will be making some changes to the format this week, I really want to start bringing some options education into the mix so stay tuned.
Unless you’ve been under a rock this weekend, Israel and Gaza are now at war so the markets are a little jumpy.
Let’s jump in.
News of the day
Today is a bank holiday here in the US. The markets are still open, but I expect trading volumes to be significantly lower than usual. This lower liquidity means that whipsaws are possible in the price action. Do Not feel obligated to trade today.
Israel was attacked by Palestine this weekend and the death count is high. They have already declared war and Israel has promised a pretty vicious counter-strike. First off I am offering my prayers to anyone affected by this war, it’s going to be bad.
Second, the markets were very jumpy heading into the open. There is a lot of red across the premarket heat map and the SPY is looking like a Gap Down this morning.
War has historically been “good” for the markets, but at this point, we are constantly streaming money into the losing battle on the Ukrainian front, now we have a war in the Middle East with our only “ally” that’s over there. We have a stream of people coming in illegally at our southern border. Add to that the ridiculous levels of government spending and printing and I think the market is nearing a critical mass.
At a certain point, we cannot take any more. How that actually plays out I am not sure, but now more than ever I am going to start taking alternative investments more seriously. I will do an entire post on that later this week, it might even be a separate newsletter altogether.
Trading today is going to be understandably volatile. My game plan today is to hit the safer names if possible.
First up some housekeeping on trades. I am currently open in only a few names, first is GEO. I am looking to start to trim that around the $15 mark. It’s a small position of a few hundred shares, but still some cash flow. I snagged some TSLA calls on Friday for next week. I will be looking to close all but a few contracts around the open. I have no faith in this market. ENVX and O will remain at full size.
First, on the watchlist, today is a defensive name, and one not unfamiliar to WR readers: RTX. I am watching this on a gap-up this morning to try and trade it back through the earnings gap from earlier this year. This will 100% be a put spread so that if it just chops around I get paid regardless. I just think a temporary bottom has been put in.
Next up is CVX. Any time anything happens in the Middle East, oil responds. I would expect no difference there. It looks like it is already gapping up this morning so the play here is to watch and see how it reacts on the open. While I am just putting this on your radar here, I will post up any trade I take on my Twitter.
Finally, I’ll be watching HAL today for a spike. Usually, Halliburton does well around times of war so I would expect this to be no different. Again working strictly with a credit spread here.
Trade well and Good Luck
As always this is all for educational purposes only. You are solely responsible for your trades as I am for mine. Nothing in here should be construed as financial advice, but only educational content about the markets and my particular trading style.