What Are the Insiders Doing?

Hey Influence Traders,

The S&P 500 hit a new all-time high on Monday with information, technology and communication leading the way.

So all is rosy in S&P land, right?

Not so fast …

Power Factors

There are some signs that not all is right in the world of stocks.

      • On Monday, three stocks fell for every one that rose.

      • The G7 global minimum tax plan looks a little one-sided … and not the side of the U.S.

Sure, treating all companies the same in all countries sounds fair, but is it?

Remember, the world’s biggest and most successful multinational enterprises are overwhelmingly American.

That means that the U.S. will lose more with tax-base changes than it would gain, both at home and abroad.

If the G7 proposals go through, Wall Street will not react positively to K Street’s global actions. 

      • Some corporate insiders have made recent #PowerMoves … or Power Sells.

 

These sells could indicate that insiders view their valuations, and potentially the valuations of the broader market, as being too rich. 

We are overdue for a correction, and these are leading indicators.

Power Moves Portfolio

Good news or bad news — it does not matter to the Power Moves Portfolio, which is up nearly 13% in its first couple of months. (You can peruse the trades and track record here.)

Andrew and I are always searching for the best trades.

      • We did sell a little out-of-the-money premium in General Electric (Ticker: GE) and Cleveland-Cliffs (Ticker: CLF). See the action below …
      • Net, we own puts in Ford (Ticker: F), Invesco QQQ Trust (Ticker: QQQ), Taiwan Semiconductor Mfg. (Ticker: TSM) and Palantir  (Ticker: PLTR).
      • Net, we own some calls in The Global X Cybersecurity ETF (Ticker: BUG), GE, TSM and PLTR.
      • We have some short put spreads for theta in GE and CLF now.
      • We are back in CLF with a sale of five CLF July 16 15-/21-strike put spreads at $.96. This is a big chunk of capital, and we will adjust with a put if we need to. The implied volatility (IV) is super high in CLF, so we’re just looking for the $20 area to get back in.
      • BP (Ticker: BP) seems to be moving up and sideways. This trade is up about 15%, plus we own the QQQ puts for a bonus. I closed the BP puts for $.20, or net .22 on the initial trade. I am keeping the long BP July 16 22-strike puts and will look to sell against them again.
      • Global X Cybersecurity ETF (Ticker: BUG) is making a new high and our four BUG Sept. 17 28-strike calls for $1.25 are up $.25, or about 20%. The stock is illiquid, but the IV in the calls are cheap, so we thought this was the best way to play the Ransomware story. We’re looking for a double on the calls.
      • GE is a play on green energy.  We own two GE Sept. 17 14-strike calls for a credit.  We added a sale of two GE July 16 12-/14-strike put spreads at $.62. GE looks awful, but $13.38 might not be a bad entry price … but with SPY going to all-time highs the GE selloff does not look good. It would appear GE goes lower in the short term.

General Electric Co. (GE) 1 month chart.

      • We bought two TSM July 21 125-strike calls for $2.51. TSM as a stock has been tough, stalling at $119 twice. We will give it one more rally shot, or else we will close and just look for a lower, more opportunistic entry.
      • PLTR stock has stalled and we have just one call here and two puts. Stock is stuck, and this trade seems dead, but we have another week to run on the puts so we will just hold this for now.

Cutting Through the Noise for You,

Frank

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