Todd Gordon


Last quote by Todd Gordon

We're going to put a $9.60 stop-loss on the premium we just paid on those 10-call options, so if we break below $9.60 [on the USO], let's cut the trade. Otherwise, we should be able to go up and re-test those mid-$50s in crude oil.
Mar 20 2017
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Todd Gordon quotes

We're starting to see the bond market and the gold market rally up into Inauguration Day as the stock market is acting a little weak up here.

It looks like we're going to try to pierce up through this resistance level just at about $123, and we're focusing in on this little gap up here just around the $130 mark.

I don't know if we're going to get up that high into inauguration, but let's play a move up through this resistance on an approach of that gap close.

If it gets down to 30 cents, in terms of premium remaining, the trade goes against us, let's cut the trade and move on.

We've seen [Alphabet] as well as the other tech stocks start to re-emerge as the market leaders in here. It looks like with the tech strength that we have, we should be able to poke through and make new highs.

We've seen a bit of a snapback here in the market and I think this little pullback is an opportunity to sell near term for a continued push lower.

The dollar's had an amazing run to the top side on the back of the Fed beginning to normalize interest rates.

We just saw some existing home sales data that was the best since February 2007, just before the stock market collapse based on the housing market. So a company like Home Depot should certainly benefit from this housing market.

We have interest rates that are continuing to press higher. [This] will help [banks'] net interest margins, which will help increase their profitability.

I like the bottoming formation in crude, but I think better opportunity rests in trading in the actual energy stocks.

If the Fed hikes, and they most likely will, and don't deliver any sort of concrete information as to when they're going to hike again, you could see the dollar sell off and the gold market rally.

Statistically speaking, since 1990, December will finish positive 74 percent of the time.

We've seen really strong moves in the financials and industrials, which are all very well-represented inside of the small caps.

Why would you risk $60 to make $40? Because we're selling puts that are 80 cents below the market… so we have a higher probability of success.

I like the setup, so I'm going to take it through the OPEC meeting.

We're shorting puts that are below the market, so we're already in a position that is in a profitable situation. And if volatility drops off, that volatility will continue to come into account.

We're seeing a pretty good area of support that's been in play for the last two years, and it looks like it's a good idea to take the other side of this trade.

The for-ex flows like to come in where there are higher rates of return available, which right now, that is in the U.S. strengthening the dollar.

If the premium, the value of the options spread drops by half, under 25 cents, let's go ahead and cut the trade and contain the risk.

Fundamentals and inter-market analysis of the banks look solid.

Couple that with oil prices that are struggling around the $50 region and a stock market that I believe is very overbought, all those forces could press EWW lower.

We're selling a call spread that is several dollars above the current price, so we have a high probability of success. That is what we pick up in exchange for the skewed reward to risk ratio.

You don't want to buy calls, which is also a bullish bet, because those calls based on the implied volatility are overvalued, so it's better to be selling the expensive puts.

It looks like we could continue to press higher following the report on Nov. 2.

Into an uncertain event like earnings, implied volatility will increase because the expected movement is very high.

The dollar is threatening to break the range that's been in place since March 2015 as we're moving into a series of potential interest rate increases, which makes that U.S. dollar more attractive overseas.

We can see that the euro is in quite a nice downtrend already, so we expect to see this trend bringing us down to about the 103 mark.

It's a stock that's just been underperforming for months and heading into earnings on November 3. I think Starbucks is finally ready to punch through pretty critical support levels.

Health care has been an underperforming sector SPDR, and today it seems like they want to punch through.

We have a couple factors suggesting that emerging markets, along with domestic markets, can continue to press higher.

If the market were to go back above $124, the recent range of the last two days, I'm going to [get out of the trade].

While we're above the $124 mark here in the GLD, I think it's a buy and we could move out of the range in the gold market.

What we want to do is buy some in-the-money calls and have basically a long stock position but use the options market's leverage.

It looks like we want to go back up and retest the pre-credit crisis highs right around mid-2007.

We've broken from the 2010 [high] to the 2016 [high] right at about the $30 mark.

I believe the Fed's mission is to keep volatility as low as possible heading into that November election. I think it spells flat interest rates, a lower dollar and a higher gold market.

If GLD were to simply break below this low, about $124.50, we're going to get out of the trade and protect premium that we've outlaid.

In this kind of market, which is low volatility, I don't think it's a good idea to wait to get to the breakout point and then try to play the push through. I think it's a good idea to trade up to the decision point, and if the market continues to break out, maybe we can take profits and hold onto a piece for the ride.

We have technical support from two different trend lines right at about the $210 region. So if you like the fundamental story with Tesla, this technical setup offers a pretty good opportunity to be in on the long side.

You could potentially risk $10 to $12 on this trade to make possibly a break out towards the range. As we scale back, that ultimate range breakout should be able to take you up towards that $300 mark.

If XLP moves back above the $55 mark, I want to cut the trade, protect any premium that's remaining, and move on to the next trade. But otherwise, we should be able to go down to the $53 in the face of a potentially increasing interest rate once this Fed ping-pong match is over.

The sectors that are responding the most are those interest rate sensitive sectors.

Right now, it looks like the markets are starting to price in a Fed rate hike. If interest rates move up, that means the interest rate-sensitive sectors like XLP should move to the downside.

You're seeing that inverse relationship between the bond market kick in, and I think bonds are right on the edge of a drop, indicating we might have an increase in interest rates here.

We're trying to get from point A to point B. We're not trying to hit a home run here and call the end of a 35-year uptrend in the bond market; we're just trying to go to [the] next zone of technical support.

They say don't sell a quiet market, but I'm very much on guard for a reversal out of this uptrend channel in the Russell.

We've broken recent resistance that will now act as support around the $290 mark in IBB. I'm going to be looking at trades on the long side in these two ETFs to break the broader S&P 500 out of the consolidation.

As a hedge, if you are long markets and you want to get a safety trade on, I want to go ahead and put on a long FXY trade.

The Japanese yen is a very important market to indicate global risk appetite. The relationship we need to focus on as a U.S. investor or a global investor is a weakening yen is good for global stock markets.

I think it's time now to hedge [our portfolio] as we become very overbought in the stock market. I see the bond market, specifically TLT, which is the ETF that tracks 20-year U.S. Treasurys and longer, pulling back into support.

Basically what we're doing is selling puts below support, which is a net long position in the bond market, which will serve as a hedge to your long stock portfolio.

We'd expect to see a little bit of a move down. Then if the stock market becomes overbought, we begin to pull back because we're heading into a huge earnings week. We could see the TLT begin to push higher.

If the trade moves too much below that short strike around $27, let's get out of the trade and salvage any premium that we can.

If this stock market break is for real, we should be able to get down and test lower levels in the bond market.

The Nasdaq daily chart has been in a long-term consolidation, and I'll define that consolidation coming from late 2015 if we draw a trend line through all major significant highs. We're looking at implied volatility to the QQQ, and you can see implied volatility down at about 13 or 14. Options are very cheap because volatility is very low, so let's use this opportunity of cheap options pricing to get some upside exposure.

The greater the expected price movement over some kind of event, the more expensive puts and calls become because the greater the chance that strikes will become in the money.

This is the week of potential Brexit, and markets are pricing in high degrees of volatility, specifically in the macro markets like bonds and commodities and currencies.

We can take advantage of this implied volatility that is very expensive.

All the higher beta names you'd like to see leading in a global market are not.

We would like to sell this expensive implied volatility. We can see that the UUP as we [look longer term] has made a higher low looking to break out of downtrend resistance.

Falling bond yields and interest rates will hurt the earnings capability of the financials due to their net interest margins, which is basically borrowing in the short term, lending in the long term.

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