Archive Category: Wednesday Windfalls Alerts

This tells me that for now, bullish investors and traders who did well in tech stocks prior to the 2022 bear market are chomping at the bit to get back into the same names, hopeful that the Fed will soon pivot and spark a new bull market. I’m not so convinced this will last, so I’m not putting my long-term money on these names. But our Wednesday Windfalls strategy is short-term and can certainly benefit from even short-lived bursts of buying interest in any type of stock (even ones you wouldn’t want to hold for the long run).

Yesterday was lackluster in the market, but stocks are trading higher today. This week’s result is too close to call, but I estimate we may see a slight overall gain. Shares of all three of our positions are up since our Monday entries, but our shares of the SPDR Select Financial Sector ETF (NYSE: XLF) and American Eagle Outfitters (NYSE: AEO) are up only slightly, so the calls we bought are down a bit. The bright spot is a 3%-plus gain in shares of American Airlines Group Inc. (Nasdaq: AAL). That move has pushed the value of the $14-strike calls we bought up by more than 50%.

As I trust you’ve seen, the banking sector is in flux. Flux is good for a short-term trading strategy like ours. We need prices to move, and move quickly … for our options to pay out handsome multiples of our entry price. I’m not convinced the worst is over in the banking sector, so long-term investors should be cautious. But the near-term volatility is setting up some nice short-term trading opportunities for us on the bullish side.

I don’t expect we’ll exit this week’s trades with a large loss, but it’s a loss nonetheless. That’s of course a disappointment since all three of our trades were in the green as of yesterday. One of them, a call option on Macy’s Inc. (NYSE: M), was up more than 100%. The backtesting and beta-testing I did on this strategy, before officially launching Wednesday Windfalls, certainly factored in all the volatility that tends to come with Fed week. Sometimes it works in the strategy’s favor. But other times, as it appears to be this week, it works against it.

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