원문 보기
We have seen some sector rotation from some hardware stocks to other markets. For example , we saw Costco stock rise. We have seen the shares of some healthcare products rise. And that , I think, is a healthy sign that the overall market is okay now , at least right now, where instead of people moving to cash and everything just being aggressively sold, we're seeing a rotation out of these products into other commodity markets.
So the Dow Jones ended last week higher, while the Nasdaq was still down . So I think that's probably going to be a major trend, and there are still products like Microsoft. Michael Berry came out and said he was a bull at Microsoft, and that was probably the reason for this big reversal. But still, from 460, when I thought it was going to go back to 550, from 460 all the way down to 350, our buddy Glenn wasn't too happy, because I thought, " Yeah, Microsoft—this is the bullish deal I'm talking about.
" And you know, he wants five more days of natural movements at 20 points by 20 points. But this thing only had two green bars with three ticks, and in barely three weeks it had fallen 100 points. So we placed some positions at Microsoft. And I think you'll see the same thing, you'll probably see a rotation from hardware to software.
Especially names like Microsoft, whose shares are ranked seventh. They're not going anywhere anytime soon . And if you think the e-mini and Nasdaq will continue to rise to all-time highs, it's probably because of the rotation from these products that went crazy to products that weren't as heavily involved.
That's how you get that overall drift above. Unlike the straight-line missile we saw at the lows of war. 100%. And I mean, the gist of your point is that I didn't realize that Michael Berry was replacing Microsoft, but it looks like the last day of trading in Microsoft stock had one of the highest trading volumes -- obviously one of the highest trading volumes in months, maybe even the last 365 days.
Mike, and Microsoft stock traded around 185 million shares. I believe it was last Friday , which, I mean, significantly more than any other trading day in the last 365 days. So, I don't know, maybe there was a little more, well, a little more, probably, energy when Michael Berry is involved in these trades, but the stock is definitely very active, for sure.
Yes, exactly. Um, and I think, speaking of that, I know we would like to propose an idea for a trade. I think for me, if I believe the market is just going to fluctuate, we won't see too much movement; and even if we do see, I'll make sure I clearly define the risk here. But I think the sector rotation will provide a more neutral, balanced trading range for the E-mini compared to the Nasdaq because the Nasdaq is very volatile because it pushes and pulls in one direction because it's all, you know, it's all sectors or semiconductor companies and then artificial intelligence and then software.
So it's like a lot of push and pull, whereas the E-mini at least has more sector diversification. So we continue to see Micron stocks fall and healthcare stocks rise, and these other technology stocks that are in the S&P 500 are balancing out due to rotation. I think this is getting into an " iron condor" for the 4-day cycle, where on Monday or Tuesday, if we have that kind of drop before the employment report on Thursday, that could be a situation where you get a big crash in implied volatility and, uh, premiums here in these four-day options.
So maybe we'll take advantage of, uh, I know I'll take advantage of getting into a little long delta. I will be checking out some of the premium positions, especially as the next few weeks approach. I'm glad Microsoft is one of those deals I didn't notice early on. So this is one that looks a little more attractive for getting into a long delta after all the consequences, if that makes sense.
Yes, of course. Yes. Hmm, yeah, I think I'll do that. I'm going to do it. This is basically what I do on SPX. I'll just sell the Iron Condor for $200, risking $300 . Hmm, but I'm going to do it over a four-day period, just to, uh , put my money where I'm talking in terms of sector rotation. We may see a balanced E-mini range at least through Monday and Tuesday.
Because it's a four-day cycle. That $200 could drop to $100 pretty quickly if we hover around that level on Monday and we don't really see much change or movement. So, I'm going to do it. I really like it. I actually really like it. Um, given the extended trading hours that the futures market offers, what would you say you like more than using something like espionage and using strangles to do it?
Is it simply the opportunity to be involved in the market and be able to take advantage of it with the flexibility that futures give you? Yes. Yeah, futures, uh, I think when you trade E-minis and Nasdaq directly, I think you have a lot of flexibility with futures products because they have good trading hours, they're super liquid, and you don't have to deal with breakout risk.
I think that's one of the hardest things an options trader has to deal with in the stock space, simply because you're going to have these moves where, I guarantee you, Micron tomorrow morning is probably going to swing up or down 40 points from where it closed. So, and it's just the nature of the beast.
So until we get, uh, extended hours for Micron, I think it's harder to manage positions. Because if you have a short put that is right at the money, for example, or a short put spread, you don't have the ability to manipulate it and move it around like you can on E-minis. Because you can set an alert 20 pips out of the money from where your spread or your short option is, you can get an alert and then you can, uh, manage the position.
So I really think that, uh, futures offer that. You also have, uh, a different tax treatment if you trade futures, uh, and different leverage. You have a margin of stretch. So, I really like futures products, but they're pretty simple in the sense that you can't...it's harder to articulate and express an opinion really clearly or really clearly, um, tuned, just because it's a sector, it's ...it's not a sector, it's a futures product that contains a lot of different products. So there is definitely 100% some interaction here.
Comments 0