Invest and Trade Profitably with Jon Johnson

Weekender for 11/13

1. Market Summary

Election Uncertainty is Quickly Forgotten

  • Election uncertainty quickly forgotten given the Consumer Price Index (CPI).
  • Inflation pressures fade just a bit, but the market acts as if inflation is already beaten, a soft landing is skipped and nothing but expansion ahead.
  • DJ30 surges 1200, the Nasdaq by 760, and even cryptocurrencies are up.
  • Dollar down, bonds rally, gold rallies.
  • Auto loan delinquencies hit a 10-year high
  • Fed-speak matches the statement, apparently viewed as wildly dovish. Perhaps so when compared to Chairman Powell’s presser.
  • Indices turn from teetering on Nasdaq to strong surges.

Modest premarket gains turned into monster gains as the October CPI was still hot (7.7%, 6.3% core) but not as hot as feared. Finally, the market got a miss on expectations regarding prices, and the market ripped upside on the news.

Gaps higher everywhere pushed the indices from teetering in some cases to surging through resistance in most cases. 1200 Dow points, 760 Nasdaq points. Quite the squeeze. Quite the irony as well as the Fed now has to deal with a rallying market, and despite the now 4.90% priced terminal rate, which will likely be a rate still over 5% before it is done, before it can say it “broke” inflation. Likely a few other things will be broken as well.

NOTE: The figures and information above are from the 11/11 report.

Watch the Investment House Videos For This Week Here!

NOTE: The videos are from the 11/10 report.

2. Targets Hit

Freeport-McMoRan Inc. (NYSE: FCX): We knew that commodities stocks would continue to perform … in their own volatile way. FCX is a primary copper stock, and we had our eye on it as it formed a two-month inverted head-and-shoulders pattern as part of a larger base that started in late spring 2022.

It broke higher Oct. 21, clearing the 50-day moving average (MA) as it made the break higher from the inverted head and shoulders. Given the bigger base, we anticipated a test, and sure enough, FCX faded the following Monday and into Tuesday. On Oct. 25, however, FCX reversed off a gap lower that tested near the 10-day exponential moving average (EMA). That was our entry signal for Investment House Daily.

We issued the alert to buy with the stock asking for $31.90. We also included a buy on January $32.00 call options, which were asking for $3.45.

FCX closed nicely higher that session and then gapped upside the next, moving to close just below the 180-day MA. That resistance precipitated a test, but FCX again faded to the 10-day EMA and used it to launch a new move. Then came the early November drop in stocks, but FCX bounced sharply off the 50-day EMA after just a short fade.

On Monday, FCX gapped again, this time jumping over the 180-day MA. Midweek, FCX touched the initial target and we issued the alert to sell half the stock bidding $38.45 for a 14+% gain. The alert also stated to sell half the options bidding $6.00 for a 73.9% gain.

On Friday, FCX surged again on the news of China ever so slightly loosening its COVID-19 quarantine restrictions. That was good for another $2 in the stock, and that pumped up the options so we issued another alert to sell another half of the options that were bidding for $7.00 — a solid 102% gain.

We also banked gain in the following plays:

ConocoPhillips (NYSE: COP): 85% gain in the options.

Illinois Tool Works Inc. (NYSE: ITW): 96% gain in the options.

W&T Offshore, Inc. (NYSE: WTI): 26.9% gain in the stock, 56.4% gain in the options.

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A wild week in Technical Trader Alert, with the same leaders in oil and gas, metals and commodities performing, but also industrials working quite well. Late in the week, the Consumer Price Index (CPI) numbers, while still grotesquely high, sparked a jump in techs and consumer discretionary — as well as in the same stocks that have performed well to now. We picked up some more positions along the way and took some nice gains as great patterns continue performing.

APA Corp. (NASDAQ: APA): 74.6% gain in the options.

Freeport-McMoRan Inc. (NYSE: FCX): 91% gain in the options.

Southern Copper Corp. (NYSE: SCCO): 50.8% gain in the options.

Exxon Mobil Corp. (NYSE: XOM): 107% gain in the options.

Receive a risk-free trial to Technical Trader and save 50% by clicking here now!

Peabody Energy Corporation (NYSE: BTU): Commodities stocks are always volatile — the nature of the beast — but that goes both ways.  Add on a sector that no one loves but everyone does: coal.  Then you have a wild one, but it can return handsomely. Coal is like McDonalds. No one admits to going — “horrible food, terrible for you, disgusting … Oh, I’ll have a Big Mac, large fries, and a diet Coke” (borrowed loosely from Jim Gaffigan).

Who did Europe call when it discovered it had no fuel for the winter?

Not Ghostbusters. Coal. Capital C, rhymes with P and that stands for Peabody (BTU).

BTU broke higher in late September to early October, came back for a picture perfect 20-day EMA test and then started back upside. Textbook. We issued the alert for Rapid Profits Stock Trader subscribers enter on Oct. 13 at $18.47. This was going to be easy. BTU started upside off the test, picking up some speed, then flop. It fell back to and through the 50-day MA. It spent almost two weeks going nowhere in a lateral move. It was volatile then not.

Well, the volatility returned to start November, and BTU caught fire (the wit is flowing like molasses today).  In keeping with the play, however, it was a most bizarre time. BTU surged on earnings. BUT we were told the earnings were a false release. BTU fell right back down. Then, the real earnings came out, and they were just as good. BTU shot higher back to back sessions, hitting our target Monday.

When that happened we did not wait around but hit the sell button, issuing the alert to sell the stock asking $29.55 for an 8.8% gain.

We also took gain on the following:

OraSure Technologies, Inc. (NASDAQ: OSUR): 14% gain in the stock.

Now is a good time to become a member of Rapid Profits Stock Trader. The system is geared towards bringing you consistent, short-term gains of 5-10% and you can expect four to six trades every month.

To receive a risk-free trial and save 50%, click here now!

3. Covered Call Options Play

Antero Resources Corp. (NYSE: AR) — Antero Resources Corp. is currently trading at $37.63. The Dec. 16 $38 Calls (AR20221216C00038000) are trading at $2.90. That provides a return of about 10% if AR is above $38 by the expiration.

Learn more about our Covered Call Tables here!

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