Volatility
December 23, 2022 | Daily JAM, Morning Briefing, Videos, VIX, Volatility |
Today I posted my two-hundred-and-nineteenth YouTube video: Fear Is Still on a Holiday Today’s topic: Fear is Still on a Holiday. This is a peculiar market for many reasons. Stocks are sinking, but volatility fear doesn’t seem to be rising. On December 20, for example, the S&P 500 fighting a 5-day losing streak. Havens of safety were getting smaller. Pharmaceuticals and airlines, which have been strong recently, sold off on December 19. Searching for glimpses of green, like Coke (up just .14%) in a sea of red is getting harder and harder. What’s curious though, is the VIX, the CBOE Volatility Index, better known as the “Fear Index” remains on the average to low end of its recent and historic range. their recent range. The VIX tracks prices for options and futures on the S&P, so as people, in fear of a downturn, hedge by buying “insurance” against a market drop, the VIX rises. But right now we’re seeing a market that truly stinks–that’s a technical term, I know, but you can Google it–while the VIX remains low, showing little sign of fear. My explanation is that at the end of the year, investors aren’t looking to hedge against a market they still hope will turn around. The VIX is an interesting short-term play here. Buying a Call option with a 60-day out as the market returns to fear, or rationality, in 2023 could be the way to go. I’m going to check on the up-to-the-minute price action and see if the Call option is attractive here. Look to my paid JubakAM.com and my free JubakPicks.Com sites on Friday for a buy or not.
November 28, 2022 | AAPL, Daily JAM, Volatility |
Apple (AAPL) shares fell 2.63% today on estimates that Covid-lockdown turmoil at Chinese iPhone supplier Foxconn Technology could result in a production shortfall of 6 million units of the company’s iPhone Pro. And there’s a chance that production shortfalls could grow if Foxconn can’t get workers back to its assembly lines. The Put option on Apple that I bought back on October 12, 2022, jumped 59.79% today to $136 for a contract on 100 shares. But this option with its strike price of $135 expires on December 16. Which means that I’m running into that good old-time decay problem. If the stock, which closed at $144.22 today, doesn’t fall below $135 by December 16, then this option will expire worthless.
November 3, 2022 | Daily JAM, Videos, Volatility |
Today I posted my two-hundred-and-first YouTube video: Quick Pick Brazil ETF EWZ. This week’s Quick Pick is Brazil, iShares MSCI Brazil ETF (NYSEARCA: EWZ). While the election in Brazil isn’t totally over with an actual concession speech, it’s clear Luiz Inacio Lula da Silva has defeated President Jair Bolsonaro, making Bolsonaro the first Brazilian President ever to not win a second term. Bolsonaro has yet to concede to Lula and his followers are still engaged in massive protests against the outcome. Even if Bolsonaro never concedes, a good measurement of how the post-election violence is trend is the number of roadblocks by Bolsonaro supporters throughout the country. The current count is 192 roadblocks cleared, 271 still up – but the Supreme Court has imposed fines to put pressure on the police to remove the roadblocks. As the roadblocks go down and Bolsonaro supporters gradually retreat from violence, Brazilian stocks will go up as Lula steps into the presidency. The iShares MSCI Brazil ETF currently is paying a hefty dividend of 11% 12% and you get a lot of exposure to Petrobras and Brazilian consumer stocks. I especially like that consumer exposure since I think Lula will invest in the consumer sector.
October 25, 2022 | COP, Daily JAM, EQNR, Jubak Picks, PXD, Videos, Volatility |
Today I posted my one-hundred-ninety-sixth YouTube video: Trend of the Week Seasonal Trends in Energy. This week’s Trend of the Week: Seasonal Trends in Energy. There’s a predictable pattern in oil and natural gas prices. In late fall, October to November, you can expect a deep dive to begin and carry on through the winter, with a sharp rise in March and early spring. You can see this trend looking at previous years in the United States Oil Fund (NYSEARCA: USO) and the United States Natural Gas Fund, LP (NYSEARCA: UNG). Right now, we’re heading into that dip in energy prices but you should not sell – in fact, you should be adding to these positions. This seasonal fall in energy prices will allow you to get ahead of the spring bounce. Europe’s energy supply is enough to get through the upcoming winter but, in March, as they look toward next year’s supply, they’ll need to start rebuilding inventories in a market strained by the war in Ukraine, cuts in production, and a hostile OPEC. Stateside, the US Energy Information Administration is projecting record production from the Permian Basin of Texas and Oklahoma, as well as record production of natural gas this year. Even though we’re not seeing a whole lot of capital expenditure, they’re uncapping wells and pumping them harder. Look at USO and UNG as ETF oil and natural gas buys For individual stocks I’d look at Pioneer Natural Resources (NYSE: PXD), ConocoPhillips (NYSE: COP), and EQUINOR (NYSE: EQNR)–all of which I own in portfolios and have no intention of selling anytime soon.
October 25, 2022 | CORN, Daily JAM, Volatility |
It’s not like the grain export deal that Russian President Vladimir Putin signed is working all that all. Grain exports from Ukrainian ports on the Black Sea are running at an estimated 25% to 30% of pre-war levels. But any exports of Ukrainian grain have been a boon for consumers struggling with food inflation. And especially for consumers in developing economies where the issue hasn’t been just the price of food but also its availability at all. But that deal expires on November 19 and no one knows whether or not President Putin will renew it.
October 12, 2022 | AAPL, Daily JAM, GOOG, Volatility |
I’m adding Puts on Apple (AAPL) and Alphabet (GOOG) to my Volatility Portfolio today as insurance against a big market dip on a bad (as in high) Consume Price Index inflation number tomorrow, October 13, and against selling in the shares of these two stocks on their earnings reports on October 27 and October 25, respectively.
October 11, 2022 | Daily JAM, TSLA, Volatility |
Even before the Biden administration launched a new U.S./China trade war by imposing restrictions on U.S. exports of advanced chip technology, Tesla (TSLA) was facing a sales slowdown in China. Now, with what I regard as the near certainty that Tesla will be one of the choice targets in any Chinese retaliation, I think it’s time to sell Tesla and get out of the way of what looks like a truly nasty tit-for-tat war of sanctions and restrictions. Tomorrow, October 12, I’m selling Tesla out of my Volatility Portfolio with a loss of 63.74% since I added it to the portfolio on November 10, 2021, near what would turn out to be the high before the onset of today’s Bear Market for technology stocks.
October 3, 2022 | Daily JAM, Jubak Picks, Millennial, Special Reports, Top 50 Stocks, Volatility |
Is there such a thing as a perfect stock? Depends. Not a chance, if you mean a stock that will be perfect in every market for every time period. No way, if you mean a stock that will go up steadily from the day you buy it. Nah, if you mean a “Buy and Hold Forever Stock.” But there are stocks that are “perfect” for a specific kind of market. And there are stocks that are “perfect” for a specific holding period. And there are stocks that are “perfect” for investors with a specific portfolio goal. And in this Special Report, I’m going to give you 10 of those Perfect Picks.
September 26, 2022 | Daily JAM, PFE, Volatility |
This week’s Trend of the Week is “Drug Stocks Aren’t a Safe Haven Anymore.” Drug stocks seem to have lost their safe haven status. As of September 20, the Health Care Select Sector SPDR ETF (XLV) was down 4.6% in the last month, and Pfizer (PFE) was down 7.55%. Why? Investors who were looking for safe havens may have decided they don’t need them any longer if the volatility continues to not be as bad as expected on the downside. Or many analysts cut their estimates with the signing of the Inflation Reduction Act, which took steps toward drug price negotiations for Medicare and Medicaid. Or since drug stocks have been falling maybe they’re no longer a safe haven. (And yes, that’s circular logic.) Some of the ETF dips can be attributed to one stock: Moderna (down 12.46% in the last month) which is considered by much of the market as a one-trick pony–a Covid stock. However, I’m adding Moderna to the Jubak Picks Volatility Portfolio on September 27 because the company has a pipeline full of new vaccines based on the success of their Covid vaccines. Overall, drug stocks may not be the safe havens that they once were but there are still selective buys in the sector.
September 22, 2022 | Daily JAM, JO, Videos, Volatility |
Today’s Quick Pick: JO (NYSEARCA: JO) otherwise known as Barclays iPath Bloomberg Coffee Subindex Total Return ETN Series B. As I’ve shown you in the video, I’m growing my own coffee plant to head off the coffee shortages we’re seeing now (first beans projected in 2028; enough for a cup? 2032), and will likely continue to see long-term. Brazil is the world’s largest producer of coffee but its inventory is projected to drop to about 7 million bags by March, (well below the comfort level of about 9-12 million bags.) A long-lasting drought is to blame for the shortages–and that dicey weather is likely to be with us for quite a while. Meanwhile, global coffee consumption is going up by 1.5% projected this year (2% last year). While JO is volatile since it trades on the commodity price, what interests me about it at the moment is that it’s NOT correlated to anything else like interest rates or inflation (though it definitely contributes to inflation as coffee drinkers well know.) This ETN will continue to go up, even if the market goes down. (JO is a member of my Volatility Portfolio on my subscription JubakAM.com site.)
September 15, 2022 | Daily JAM, EVGO, Millennial, Morning Briefing, Volatility |
Wednesday, September 14, President Joe Biden used a visit to the Detroit Auto Show to announce the release of the first $900 million in funding for the buildout of a national network of charging stations for electric vehicles. The funding, part of $7.5 billion in the Infrastructure bill to build out a network of 500,000 charging stations, would go to 35 stations to build charging networks along 53,000 miles of highways. Today, the sector is moving up rapidly with ChargePoint up 8.60% and EVgo up 12.16% as of 2:30 p.m. New York time.
August 26, 2022 | CORN, Daily JAM, DBA, Jubak Picks, Volatility |
Pretty much everything got clobbered today after Federal Reserve chair Jerome Powell promised that the Fed would raise interest rates and keep them high until inflation is under control. In other words, no quick turn to cutting interest rates in the second half of 2023. So chip stocks were down today, August 26, with Nvidia (NVDA) plunging 9.23% at the close. Consumer stocks were down with Shake Shack (SHAK) tumbling 8.61%. Financial technology stocks were down with Block (SQ) shedding 7.72%. Climate change stocks, an extremely hot sector lately, were down with EVgo (EVGO) bleeding 7.86%. Hide in gold? No way. The SPDR Gold Shares ETF (GLD) was down 1.22%. (Better than a poke in the eye with a sharp stick, I suppose.) But agricultural commodity ETFs? Green in a sea of red.
