For the record I’m still waiting for the market to fall apartJ. While I wait I want to come back to s central theme for me this spring. Selling credit spreads and being in commodities like oil and gold.
Why? The manner in which we set up our credit spreads is forgiving. We set up our spreads based on the standard distribution curve. This is perfect for this type of market environment. Why? I can take in credit (income) and still achieve maximum profit if I’m wrong on the direction of the stock. And in this choppy environment that’s exactly what investors need – a forgiving trade that typically produces positive results.
I also like crude oil here. Crude has one of the most bullish patterns I’ve seen in awhile. The easiest way to participate in this potential move higher is to use the crude ETF USO. If crude clears resistance at $37.84 I’m looking for the move to extend up into the low $40s. That’s not a guarantee, it’s just what I’m currently seeing on the charts.
If you want to come into my office and learn about credit spreads send me an email. It would be a pleasure to meet, bond and talk stocks together – tim.reazor@NorAmAsset.com
I often talk stocks and markets on twitter – you can follow me by searching for my handle – @TJReazor
I hope today’s newsletter helped.
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.