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hello and welcome to prot Trader strategies Market commentary for un enjoyment Friday uh the July the 7th my name is Eric Wilkinson some of you may recognize me as The Wolf Man from CNBC Fox Business or even the Wall Street Journal for my commentary on everything from economic to geopolitical and market analysis please keep in mind that everything that we talk about in these Market commentaries is not a solicitation to buy or sell any of these Securities or strategies at the end of the day we're here to teach you some different strategies you can implement into your portfolios but please do that in your own way the reason why I can't give you a recommendation on a particular stock or strategy is because I don't know your risk parameters I don't know what's in your portfolios and therefore what I'm doing could be counterintuitive to what you are already doing please remember that past performance of any trading system or methodology is not necessarily indicative of future results having all of that out of the way let's get it on uh we do have a lot of economic data uh here and across the pond basically European area French German came out with better industrial production numbers uh German industrial production month over month came out at uh 1.2% was expected to be.
2% so much better than expected there we also got French industrial production coming in at 1.9% was expected to be .5% uh then getting over into Great Britain not such a Rosy picture there uh we got manufacturing production there came in at negative .2% was supposed to be a positive. five% and then we also got uh construction output in Great Britain came in at negative 1.2% was expected to be uh a positive uh 6% then there is also a revision to last month's number uh revised it to to down negative 1.1% uh from netive 1.6% so actually rised it up to a negative number still but that may have been a little confusing then here in the United States we got the nonfarm uh employment change which is the big un enjoyment number that's the one that I look at the most some people uh mainstream media will talk about the unemployment rate but the real number is the non-farm employment change and that that increased 222,000 uh was expected to increase by 175,000 that's the new highers uh they also revised last month's number up from 138 to 152 and remember last month was a pretty uh uh pretty big Miss to the downside but that got revised up then we got the unemployment rate it up ticked to uh 4.4% from uh the 4.3% now that number kind of showed up in the ADP now this is the reason why for one we don't really look at the ADP or put a lot of uh Merit to the ADP cuz it's off generally speaking uh the us non-farm payroll number that came out today is the one that is the most widely looked at but something that did show up in that ADP number was that uh people were uh kind of claiming unemployment more people claiming unemployment so despite the fact that we're seeing the Unemployment uh change by increase in highers we also seeing some people come off of uh the discouraged workers if you will so those are the people that have kind of stopped uh filing for unemployment and now are now going back out into the job force and looking again so they kind of come back into that number so uh that number can be a little bit skewed in a sense sometimes you'll see that number come off uh even though there's not very much employment going on and that has to do with people falling off of the uh unemployment line anyway and then we also got natural gas storages came in at a build of 70 or 72 billion cubic feet in storage expected to be 61 billion cubic feet so a build of uh 11 billion cubic feet over that that was expected anyway on to crude oil uh in the broader markets crude oil off another dollar today yesterday we were talking about it got above that 61 Fibonacci level uh looked to me like it was going to kind of hang out there maybe even press press a little bit higher uh but again we are still in that negative trend has not created a newer low but we are still seeing the uh lower lows and lower highs so this Market looks a little broken now down testing this uh value area low which is going to act as support as that uh $43 Barrel area that I talked about I threw that line in there that is a more of a psychological level in but it has shown up several times as support so we could easily see it go down break through that value area low and test that support level and now we're looking to see if it goes down and test the 42 handle uh right there is a low of 4208 is uh 42 the low is 42 uh 26 it says right there might be on the wrong might not want to go over there for it to but anyway it looks like around 4208 I think it was uh anyway it's not wanting to work with me so uh so $42 would create a newer low having gone through all that that's where we kind of settle out uh now we're seeing the gold Futures we remember we got these tweezer tops up here uh now looking pretty bearish as a matter of fact one could almost call this a head and shoulders in a sense uh be a stretch but uh could somewhat be called The Head and Shoulders with the neckline right here breaking below this Fibonacci level uh this Market is definitely on Pace to come down and test the 23 fibit level and possibly even the value area lows so this Market seems to be wanting to go down with the unemployment numbers that we've seen that Market's going to go up people pulling out of gold and putting money to work in um more risky assets if you will uh plate to safety off the table people are going to probably be coming back into equities uh the bonds you know same situation here the unemployment number being pretty good most of the numbers we've been getting out are pretty decent they're not robust by any means but that would lead one to believe that the FED is going to continue to raise interest rates so if interest rates go up by bonds go down same thing we've been talking about for some months now uh right back down to the point of control which is where I thought it should be for uh you know this last rally here I was a little bit um uh perplexed as to why it was rallying despite the fact that we were going to see increased interest rates I still have on my short TLT position it's coming in very nicely uh not quite to where I'm at my uh percent of Max profit that I'm looking for but it is starting to work out quite nicely uh then onto the overall equities uh as you can probably tell with the bonds being down equities are going to be up Dow Jones up almost 100 points today uh pretty much regain most of the losses that we saw yesterday opened up a little bit higher from the overnight sessions of the equities rallying and now we are at yesterday's highs for the most part then with the NASDAQ same situation really engulfed the yesterday's selloff really getting back and forth and have gone nowhere for the past week for the most part uh the Market's just having some major uh movement but at the end of the day we kind of end up at the same place as we were last Friday uh but the NASDAQ up 67 points right now uh doing quite well above yesterday's highs uh then onto the e- mini S&P not quite the same picture but it is really pushing higher uh looking to test those uh highs from yesterday dogs coming in it's beautiful thing about dogs being able to open up doors uh then this is the picture of the - mini smps on the 30 minute chart as you can see we have uh rallied past the opening of yesterday and are trying to retrace some of yet last yesterday's overnight trades so overall Market really blasting off on that economic data that we got there now onto a few trades that I've done XLE if you remember I put this in my um Ira XLE was selling off today I just with the data points we saw yesterday and the economic picture now you know economy starting to move you're going to start to see more people utilizing the oil and gas kind of things which is the energy sector it's all in there so with that selloff that was the directionality I wanted if you remember I had on a short call spread in there and with XLE I had on the uh July uh what was it I left on the call so I had on the July uh 662 69 call spread in there and originally sold it for around 31 cents so 50% of my Max profit was Target that I was looking for yesterday and I talked about this with these short call or uh with these uh call spreads that we have on um that are short in our Ira remember we're trying to Define that risk on the short call so that it makes it acceptable to um the powers that be that uh make up the rules that you can't have a naked short call and there so I talked about how to define that risk in order to kind of get around that rule and in that when the market goes in my direction and I'm able to get out for 50% of my Max profit which is what I was trying to do yesterday but those calls just really aren't worth anything it's really riskless to leave those on I'm going to lose maybe a penny uh on that long call if I leave it on and if I uh cover it I can only sell it for about a dime or sorry about a a penny so uh I'm not really risking a whole a lot there in my eyes so in that I went in and bought those 662 calls back and I paid 9 cents for those so that was better than 50% of my Max profit with the move down today and a little bit of uh volatility contraction I was able to get out of those quite nicely so I left on the uh 69 long calls in there and uh I doubt that the Market's going to Rally up there in the next 14 days but at the end of the day uh there's not a whole lot of risk and leaving that on for a penny so uh that's what I've been doing in my IRA for the most part especially when I'm creating these synthetic short uh naked short position so XLE just covered one side of that spread Now with uh General Mills ticker symbol GIS got into a long position here it looks like you know kind of gap down they beat earnings and they've just gotten beat up I think it's kind of overdone to the downside we're getting a little extended here not seeing a whole lot of volume traded down here which is leading me to believe that the the sellers are kind of falling by the wayside therefore uh looking for a bullish position in General Mills so I put this actually in both my IRA and in my margin account and the reason why it's got pretty low implied volatility no earnings coming up so I just decided to do a long call spread came in very close to uh my rules on this so I decided to go ahead and put it on I did the October so I went pretty far out and bought the 472 calls sold the 60 calls to pay for that extrinsic value that is embedded in those 47 A2 calls and I paid $642 so you know 50% of the max or 50% the width of those spreads would have been right around $6.25 paid a little bit above that just because I'm uh pretty bullish on this at this point thinking that we're going to get a uh up move so I gave up uh you know 15 or so cents so uh I'm also working to get a Nike trade on that is a bullish trade as well but uh that has not come to fruition all right and then on to what I've done in my margin account uh Adobe added dispos in there um Adobe I'm pretty bullish on all of these you know I'm bullish on theid I already have a couple positions on in there uh EA Sports bullish in there Adobe uh I think all of these are are going to do very well this Tech sector is going to probably start ramping up again uh so I with this pullback and uh the move higher decided to go into Adobe and do a bullish trade and went in there and sold the August 130 puts for 94 now U the IV is just slightly below uh 50 iv% so you know I'm bending that rued just a little bit but pretty bullish on Adobe it's got pretty high implied volatility looks like implied volatility is starting to roll over so hopefully I can get my directionality some of that IV to come out so I did kind of tweak that rule just a little bit but um a lot of other ancillary things kind of really put me in the uh position to want to put on that trade uh as selling position with a slightly lower than uh a 50% IV IV percent I should say then on to Apple Apple we have taken off or I took off you know I talked about this yesterday it's come down here to this level and bounced off of it several times today started moving higher confirmation that it looks like it's going to Rally up and away from it at least for the near term I only had this trade on for a few more days you know the next uh for this expiration cycle so I didn't want to risk anymore I've gotten that move move I decided to cover it uh not quite the uh 50% of Max profit but it was a nice trade nonetheless and it was in the July and I had uh bought the uh 149 puts and then sold the 142 puts now the re the deal was that I wanted to come down and test those 142s got into the 142 handle for a little bit there here and there uh kind of testing that just did didn't come all the way down there yesterday was a little bit better trade and I originally paid in this uh $324 and sold it out for $423 so made a dollar on it uh could have made a little bit more I was trying to squeeze out that extra yesterday but today with that move higher uh decided to pull the rip cord on that one and then um that's about all I've done today I'm working a couple of Trades to get out of Nvidia uh and uh add Verizon and Lulu or sorry get out of my sorry Verizon ticker simpol VZ and adding Lulu but neither one of those uh are super close so um kind of letting those ride out right now that's about all I got for you guys today today's webinar is going to be on the short call spread so I'm going to talk about how you can build that out two different ways one that um is going to have uh a synthetic type of short call that you could implement into your IRA as a synthetic synthetically kind of uh just naked short call and then as a call spread with some of my rules wrapped around that and how you build that out so go to protrader strategies.com uh I haven't been able to talk about all of those rules and all of the different things in these daily Market commentaries because that gets a little long in the tooth but I'll be able to do that in this webinar and you can ask questions back and forth which makes it a little bit uh better of a webinar because because you will be able to ask the questions that you want to ask all right so go to protator strategies.com and sign up for that if you can't take that take it easy
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