Yo Pit Crazies,
The S&P 500 tacked on a mild 200 points in three days, from Wednesday to Friday. It seems investors are betting heavily that rate hikes will be less aggressive in the coming months.
Usually, demand drops in a recession – which is what we saw in the first two quarters of 2022 – so that should slow things down.
Anyway, a second fiscal bounce could come via the new Inflation Reduction Act of 2022. While I will spare us the wisdom of spending $1 trillion in an inflationary environment, three key points are emerging …
- Solar should get a boost
- EV should get a boost
- Fossil fuels are necessary for Nos. 1 and 2
We’ve talked about it before in Capitol Gains – and it will kick into overdrive in 2022.
Ford Should Have A 20% Rally Into the End of the Year
Ford Motor Corp. (Ticker: F) has rallied from the low 11s this year after seeing high 20s in January.
What a ride.
Ford one-year chart with one-day candles. Longer-term IV on the bottom.
Now, I have a quiz for you.
Which company makes more money, F or Tesla Inc (Ticker: TSLA).
Answer: Ford!
And F, including debt, is roughly ⅛ the value of TSLA. I know getting long F and short TSLA sounds like a crazy idea because TSLA has 100- point rallies on nothing when the faithful flock back to it … But I don’t see why F can’t get to a $20 value if TIRA 2022 moves through.
This is a topic we will explore in Capitol Gains in the coming weeks and add to the OP Mentoring Div+ Portfolio.
The Rundown
Option Shopper
Licia caught the rally in gold and SPX with a 406% gain in Proshares Inverse SPX Trust (Ticker: SPXU) July. 20 puts and SPDR Gold Trust (Ticker: GLD) Aug. 05 call spreads for a 76% gain. She closed them out Friday for a killer set of wins.
To Your Trading Success,
AG