Yo, Pit Crazies,
If you missed the Thursday Cap Gains Trading extravaganza check this is out here. We give 5 stocks that are set to move with the commodity squeeze.
Speaking of inflation, I am starting to think the Fed is getting a Fauci Complex.
Here’s what I mean …
In 2020 it was all Fauci and his COVID prognostications. While many can argue the accuracy of what he said, it was impactful nonetheless.
All equity action, or most of it, is Fed related and if inflation is going to cool, the central bank will play a role.
Meanwhile, the Biden administration still is spending to fix inflation.
So we have the Fed trying to cool things and fiscal policy out to lunch.
In short, a recipe for lower equity prices and continued market volatility.
This brew is exactly what Frank, Griff and I discussed Thursday.
Here is a name we like.
VALE Pays Huge Dividend
VALE SA (Ticker: VALE) is a Brazilian company that has massive mining operations.
Right now, the stock is beaten down a bit by the strong dollar.
It will pay over 15% in dividends this year, and likely the same or more next year, due to strong commodity price demand for – you guessed it – EV cars and trucks.
VALE 1-year chart
While the Biden Administration and California push EV, the race to produce the materials that go in the vehicle is enormous and expensive.
All basic commodity suppliers will do well even if the stocks bounce around a bit.
That is the condition we have right now: Stocks might very well test 3300, but commodity producers will pay dividends.
The FOMC will opine on rates again on Wednesday and no doubt they will raise them. Dividend paying stocks are the best way to reduce some volatility in the short-term while things stay rocky.
The Rundown
SPYMaster
I was able to sell my latest SPY put spread for a 40% gain with the VIX puts near unchanged. I will ride the VIX puts to expiration to see if I can hit 100% gain on the position.
Option Shopper
Licia killed it once again with an overnight strike in Proshares UltraShort QQQ ETF (Ticker:
SQQQ) Sep16 45/50 Call Vertical closed for a 142% gain
Nitro Trader
Mark picked the apples last week in the form of short delta butterflies in Apple Inc. (Ticker: AAPL). Sept.16 152.5/149/146 put butterflies closed for a 225% gain.
To Your Trading Success,
AG