Archive Category: Wednesday Windfalls Alerts

We’re sandwiched between two holiday weeks, with the markets closed last Monday for Juneteenth and this coming Tuesday for July 4. At any rate, our system generated a number of valid buy signals today. I’ve homed in on the ones that are accompanied by the most favorable pricing in the options market — where we seek to buy underpriced calls that offer the most “bang” for our buck. So let’s get to it!

It’s looking like this week’s trades will give us another net gain. Shares of ProShares VIX Short-Term ETF (NYSE: VIXY) are down about 2.5% at last glance, leading to a roughly 40% to 50% loss in the VIXY calls we bought. Otherwise, we should have two winning trades on Vodafone Group Plc (Nasdaq: VOD) and Kinross Gold Corp. (NYSE: KGC). Shares of both stocks are up slightly more than 2%, boosting the value of our KGC calls by around 30% and the VOD calls by more than 70%. As always, I’ll wait for the dust to settle on our exits before quoting a net result. But it appears to be shaping up as favorable week.

It’s Fed week, and we all know what that means … markets could get particularly volatile as we head closer to the Wednesday 2 p.m. ET announcement. Currently, the market is pricing in 75% odds of no hike, and 25% odds of a quarter-point increase. So if anything between now and Wednesday calls the no-hike scenario into question, we could see risk assets take a hit alongside a spike in volatility. The CBOE Volatility Index (VIX) is a bit higher today but closed last week at its lowest level since the March 2020 COVID-19 scare. Let’s see how it responds to the Fed’s upcoming decision!

This week is shaping up to be a “stock picker’s market.” I say that because at the index level, both the S&P 500 and the Nasdaq 100 are flat to down since Monday. Yet, more individual stocks have traded higher today and yesterday than those that have traded down. Logically, that means stocks outside the major indexes are now doing better than those in the indexes, particularly now that we’re seeing a bit of a pullback in the small handful of mega-cap stocks that have been outperforming.

Looking at the broad market, stocks ended last week on a high note. Not only did the S&P 500 Index surge to a level not seen since last August, a majority of individual stocks participated in the rally. Nearly 85% of all stocks traded on the New York Stock Exchange closed the day higher. Today, we’re seeing the indexes edge higher. But breadth is pulling back a bit as roughly 60% of individual stocks are down on the day. That pattern — up on Friday, down on Monday — is one part of the pattern we look to exploit here at Wednesday Windfalls.