It’s getting a whole lot of coverage these days, so folks are beginning to wonder if it’s actually something to worry about.
The issue of the infamous ‘Planet 9’ or ‘Planet X’ or ‘Nibiru’ has captured the imagination of doomsayers and conspiracy theorists for decades… but now Wall Street?
Indeed, it’s so.
A number of anonymous strategists and directors from some of the biggest corporate entities on the street recently formed a group called “Renegade Prophets” that issues fortnightly press releases commenting on the approach of the star (or planet, or whatever it is), including photographs and advice to investors about how best to survive the inevitable impact of the nebulon comet-rock… and, of course, where to put their money.
The latest missive is signed by a man (apparently) who calls himself the MonoCol Priest of Caitlyn, and in it he urges readers, among other things, to engage in a degrading bacchanalian ‘subservience’ ritual that follows a minimum deposit to the group’s offshore trust.
Returns are guaranteed, of course, and are based on movements in LIBOR and an apparently new metric called the BOWELL-QUAKE.
We’ve yet to verify any of the group’s claims, though we do feel strongly about the need for regularity in all aspects of our life – including investments. We put aside a small portion of our earnings to be invested without fail every month.
We Traded Our Way to Fame and Fortune!
Unlike the Wall Street thieves club, however, we traded our way to riches. And we did it with you in mind, dear readers, the smartest bunch of subscribers in the entire financial newsletter constellation.
Below is just one recent trade that netted us a small fortune. If you got it on, congratulations!
This was a massive win on our end-of-year, blow-out bonanza recommendation dated December 29th. The letter was called What Will Be in 2016?, and there we urged you to take a clever position in Tesla Motors (NASDAQ:TSLA).
Admittedly, the trade took longer to produce than we expected, but that’s all right. No need to rush things in this world of inevitable inter-stellar currency delights!
We told you, specifically, to consider purchasing the TSLA January (2017) 230 CALL for $43.00 and selling the January (2017) 240 PUT for $43.10, for a net credit of $0.10 on the trade.
And guess what?
Today, the long CALL is going for $43.00 and the short PUT is trading at $39.00. Sell the former and buy back the latter and you come home with a wild rocket-shot of $410 profit on absolutely nothing laid out. Considering minimal commissions, call it 2633%!
And that’s not all!
Because we’ve got another trade to offer today.
But first a little background.
We mentioned the Tesla Motor Co. above as the source of a greatly profitable trade. But the company is also facing a headwind of challenges in the coming years that will decide whether it maintains its high flyer status on Wall Street in the coming months.
The principal concern is whether it can produce cars at anywhere near the speed that current demand dictates.
To wit – recently, over 325,000 souls laid down $1000 each in a bid to own Tesla’s latest invention, the Model 3. Only problem is there is no Model 3… yet. And whether there will be 300,000 – or anywhere near that number – in the next year and a half, when the company is slated to deliver, is an eyebrow raiser.
Currently, the company’s production facility can whittle out 14,000 jalopies per quarter. Will it be able to ramp up to nearly 100,000 per quarter in the next twelve to eighteen months, and still cope with all the inevitable quality control issues that follow when an enterprise adds a full complement of greenhorn line workers on launching?
What’s clear is that the market is pleased with the direction of the company.
TSLA shares gained over 93% since bottoming back in mid-February. And even though they could be due for a rest, they certainly have a better performance record than their more orthodox, internal combustion gasoline-eating counterparts, Ford (NYSE:F) and GM (NYSE:GM).
Have a look first at Tesla –
The run-up was unfathomable to all but the most die-hard TSLA cheerleaders. But it got extended, as the twice near-overbought RSI 80 reads show (in blue). At this point, we could foresee a retreat to the long-term moving averages in the $230 range (black square).
Beyond that, however, TSLA is clearly a momentum play that has everything to do with hype, hope and sex appeal – and nothing to do with real numbers.
And that’s why we like it.
But we don’t like it in a vacuum – rather, we have a relative liking for it against its would-be peers: the aforementioned Ford and GM, whose stocks have done anything but rise like Tesla in the last two months.
Here’s a chart that compares all three companies’ stock for the latest time period –
And the chart makes it clear that there’s really no contest here in terms of popularity. Everyone’s favorite automotive stock is Tesla Motors Inc., and if you’re in the game for a quick buck that’s where you throw your cash.
The All Flash No Substance Market
We’ve been peddling the idea that the market was headed toward a hype stage where the only thing that mattered was press coverage, not a stock’s fundamentals. And we’re fairly certain we’ve rounded another corner in that regard, as the next bout of earnings should show that fancy-pants stocks like Tesla, Facebook, Apple, Amazon and the like, will catch a fiery bid on a good report, while Grass Growers Inc. (HAY) will not.
It’s for that reason that we’re pairing TSLA against GM in a long/short trade using PUTs that we’re going to string out over several strikes.
It goes like this –
This recommendation is for members only…
Our recommendations have yielded over 1,247.91% since 2011. Cancel any time – manage your own membership…
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Wall Street Elite recommends you consider 1) buying the GM May 30 PUT for $1.09 and selling the TSLA May 190 PUT for $2.18, 2) buying the GM June 29 PUT for $1.15 and selling the TSLA June 175 PUT for $2.47, then 3) buying the GM September 29 PUT for $1.94 and selling the TSLA September 165 PUT for $5.75. Total credit on the trade is $6.22.
Know it, too, that all the GM PUTs are all at-the-money, while the TSLA PUTS are at least 20% out-of-the-money!
With kind regards,
Hugh L. O’Haynew