And Japan has a stimulus plan this morning, and "possibly Germany to follow". If you are unaware, the possibility of German stimulus would probably allow the market to run 10 percent higher....
drchelsea
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@drchelsea, Buy most believe Germany will never ease. Never. If they do, we melt up right away no delay...
drchelsea
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And to be completely honest here, the market has run a long way in a short period of time. We have many hypotheses behind these moves of the past 6 weeks or so, but semiconductors have benefited the most. The market has priced in an outcome from this trade situation that most people haven't even considered yet, and we are not aware of. One theory is the the market hasn't done well under trump since he took office if you calculate returns under Obama. The market seems to be pricing in where we should have been should Obama have been president still. This is a stable equity environment, with a steady VIX of 15 or so. We are corrected to this spot in our opinion. The market will probably consolidate and churn for a while until X-mas, and with the "smart money" saying that we run hard to X-mas they next year who knows, wouldn't they want to front-run their own story and get out before everyone else. Also things to consider with AMD being a leader, and highly connected to China. Further returns past 40 may be hard to come by over the next few months...
drchelsea
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@drchelsea, Or we run to 50 by X-mas in a blow off top, or we reverse, and find ourselves at 28 by next earnings. The reality is nobody knows for sure. If you are not simply buying AMD long term, then you need to be nimble and consider that either outcome is likely here. With the Fed put, full employment, and stellar consumer and Black Friday records, the 50 scenario is the 65 / 35 probability. Therefore we plan in this way.
drchelsea
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Agreed. Looking at puts at the 41.75 range, maybe sooner. Long forever. Love AMD. Retest coming unless we get MTTed (Macro Trade Tweeeted) lol. Also like 44 as price target next or even 46, but at the 42 range my profits are so great I need to start enabling protection :) Happy trading.
drchelsea
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@drchelsea, And if anybody makes the "sell AMD and take profits argument", they shouldn't be investing in AMD in the first place, and are probably throwing darts at a dart board with wing and prayer technicals, and overbought narratives...