The LongVol Report Issue 7
I hope everyone is having a great weekend ahead of this Superbowl which I probably will not be watching! I spent the morning at the local track getting some sprints/running in because I’ve been lacking on the workouts when I was away in Phoenix and listened to a podcast called “on the tape”.
Normally listening to anything trading/market related is not my thing but I was running at the track and sometimes just having the chatter helps me.
They wouldn’t stop talking about the S&P500 and tech stocks…..it’s lame and it’s a generic narrative.
On to this weeks report.
I don’t really want to get into S&P500 analysis this week but want to say a few things here (I explain again in the premium video). The S&P500 is not the end all be all but we’ve made it as such. Is it a top? Is it overbought? These are the generic questions and they’re the questions that take the same line of thought that sports-betters will take today on the Superbowl: Who’s going to win? And in my experience, it’s the prop bets in sports and other creative bets that really pay - not just “betting the obvious” aka is the market at a top?
Unless you’re going to short the SPY 0.00%↑ that conversation and the line of thinking that comes with is pointless; it’s what Retail Traders on FinTwit/TradingView do by posting their charts chatting bull$hit debating whether it’s a top/not a top.
Who cares. There are only trades. The rest is noise.
If you’re a long-term investor and are vested in names within the S&P500, then sure, the question is valid. However, making money in the markets as an active trader/portfolio manager is about generating quality long/short ideas aka your deal flow.
Not about pretending to be an economist or talking about things that do not matter.
What matters is to generate ideas and make money.
And that deal flow/trade ideas can be short-term intraday, longer-term etc. and it does not and should not begin and end only at the S&P500.
I know that’s direct but that’s what matters so me sitting here writing about my long thesis of a “market top” does nothing for P&L.
$5130-$5140 is a spot where I am interested in to see what comes of it and I explain why in the Premium Video.
Crude oil - right now and that entire sector is more important to me. The entire sector is performing well and has been and should continue to do to so. There are a few names that are going to provide (re-entry) entry soon and that is in the report.
Valero has been a favorite and it’s actually in the Model Portfolio (You can get a 21 Day Trial Here)
VSCO 0.00%↑ - I’ve been a holder of this since last November on comments made from management on turning the Company around. In fact, it was the first earnings call in years I actually sat on and they did a great job with the numbers and the markets clearly pricing it in. Part of catching fundamental inflections is seeing the idea then getting in and holding on. In some situations, you can get a 4/5 bagger and VSCO 0.00%↑ might be one of those as we get close to earnings.
This is also why, in part, my care for the market at large is just not there - as a trader you are a slave to volatility but as an investor/inflection investor you can put on positions and sit back.
I like a mix of both which is why The LongVol Report has different sections but to have to be dependent ONLY on volatility to generate returns is no way to live, I want to ring the register with the entire portfolio and put money to work in more ways than one.
Sure, I have my thoughts on the S&P and the market but they’re specific for two reasons which I get into in the Premium Video and LongVol Report issue 7 below.
Enjoy the Superbowl for those watching and I’ll see some of you tomorrow in the AM DeltaOne call.
The Weekly Outlook Video Includes:
The LongVol Report Issue 7
What matters for S&P500 for me
Crude oil outlook
Breakdown of The Momentum Monitor
Quick lesson on tail-risk