BY ANDREW GIOVINAZZI
March 5, 2024
Yo Pit Crazies,
Since Fed Chair Jerome Powell goes and puts his cape on to testify in front of Congress, I thought it would be nice to see how the banks are faring.
Overall the big banks are doing well.
The Financial Select SPDR ETF (Ticker: XLF) has had a swimming few months.
It is not Nvidia Corp (Ticker: NVDA) or Super Micro Computer Corp. (Ticker: SMCI) but those stocks are out of category.
XLF with KRE in purple on a 6 month chart
SPDR KBW Regional Banking ETF (Ticker: KRE) is not having a great year and down since early December.
Powell speaking moves markets because his actions have massive influence.
That could be a problem for stocks
Or it could not be a problem for stocks
Traders have been looking for KRE to be the canary in the coal mine but it has yet to materialize.
Big Banks like Big Tech keep rolling along with the small Main Street sector squeezed.
In OPMentoring i thought strangles for this week are too cheap. Every major policy announcement or testimony makes SPX move.
It could give KRE the boost it needs.
I even sold some Cboe Global Markets (Ticker: CBOE), a quasi financial company, put spreads to get a dividend play going.
The most bullish thing JPow can say is tell Congress to stop spending money they don’t have.
40% spending above 2020 levels is absurd and not really taking this inflation seriously.
The small banks should follow the big banks eventually so I will look for some cheap calls in KRE to go with my SPDR S&P 500 Trust (Ticker: SPY) strangles.
Money will get sick of buying NVDA at some point and cheap banks should be a decent spot.
Sign up for those here if you want actionable ideas on a Friday morning pre open on the Tradier Hub:
Mark, Licia and Andrew are streaming live every Friday on the Option Pit YouTube channel.
And sign up for a free Tradier Hub account for tons of exclusive content.
To Your Trading Success,
-AG
Andrew Giovinazzi
30-Year Trading Pro
See what's hot at option pit
CAPITOL GAINS: SMR Aug16 7 call closed for a 150% gain
DELTA STRIKE: VLY Mar15 8 puts closed for a 88% gain
PFE May17 26 calls closed for a 66% win
OP MENTORING: SPY Mar22/19 510 put calendars and 520 calls for 6.4% gain
OPTION SHOPPER: ERX Mar28 65 calls closed for a 90% gain