A shepherd boy who was minding his master’s sheep thought it would be fun to cry “wolf” as a joke, expecting the townsfolk to drop what they were doing and come to his aid. He did it not once, but twice. He thought it was funny; the villagers did not. Shortly after, a real wolf did show up. By that time, however, the trust of the community had been broken; and when the shepherd boy cried wolf this time, he was ignored. On Wednesday the newly chaired FOMC met and threw the President one heck of a curve ball, being way more hawkish than he had wanted them to be. As the markets started a long awaited slide, he decided Iran had made enough concessions and he signed a peace, "Memorandum Of Understanding." It was enough to stop the markets slide in its tracks and send a very select number of stocks higher. We all know how this ends. The wolf comes and eats the town. We just don't know when. While the market was closed Friday, the futures were open. Note what happened on this short-term chart of the S&P E-mini's: That's about a 1% drop overnight Thurs-Friday, based on some stupid headline about Iran not meeting to sign the MOU. As of Saturday AM, peace is back on hold as the Iran says "Gulf is closed." Look for peace to return by Monday's market open. The Big Picture Let's not mince words here, I am not certain of market direction going into next week. All my usual "tells" remain bearish, but the market is rising on geopolitical news and killing any and all attempts to get short. Marty Zweig is famous for his warnings to, "Don't fight the Fed," meaning investors should align their trading and portfolios with the Federal Reserve's monetary policy and not bet against the Fed. One can extrapolate and suggest, "Don't bet against the President's power to terminate hostilities in the middle east." Which brings us back to the fable, the Shepard boy, and yet another peace headline that comes to the save stocks, just in the nick of time as monetary policy takes a hard turn toward tightness. Damn, where is Marty Zweig when we need him most? Better Opportunities Abound Well, maybe abound is a bit of an exxaggeration, but there are decent risk:reward opportunities to be found. Thursday, I covered Bitcoin & Friends here, and it remains high on my list of option opportunities going into the coming weeks between now and the 4th of July. The only trade that may supersede the BTC-IBIT-MSTR shorting opportunity would be a Nasdaq 100 short trade that could come at any time and on any day. Stand-by daily next week for any new triggers that may occur. On The Long Side SPCX One stock that has my attention this weekend is SpaceX (SPCX), which after a spectacular debut was taken to the woodshed over the past few days, falling from a high of $225.64 on Tuesday to a low of $172.11 late Thursday. That's about a 25% decline over just two days, before a modest recovery to close last week at $185.00. There aren't enough data points for my usual chart analysis, so I'm working on fumes here, but anytime you can buy SPCX at a double digit discount off its most recent high, its a good time to buy. SPCX 15 Minute This 15 minute view of price action does show a downward sloping trend channel that is about to be broken to the upside. Usually such patterns are good for a run, even on this shortest of time frames. SPCX Sep $300C If the Sep $300C looks a bit too expensive for your taste, have I got a call for you...read-on. SPCH This is a Double Leveraged (2X) single stock ETF for SPCX which provides aggressive traders to double leverage into SpaceX with relatively cheap calls. Conversely, when SPCX dropped 24% high to low last week, SPCH fell almost double that, 42%, from high ($28.00) to low ($16.27). SPCH closed trading last week at $18.97, which in my book is a bang-the-table bargain. SPCH 15 Minute Ditto! Sep $25C Keep in mind SPCH printed $28.00 at its highs last week, so paying $4.00 or $5.00 for a Sep $25 call merely is betting that new, higher highs, will be forthcoming over the next 90 days. Only a market crash of historic proportions keeps SPCX down this summer. Therefore, on any SPCH close above $20.00, buy the SPCH Sep $25C with both hands. Active Options PRO Service Premium Service
