I wanted to do a quick follow-up piece to my recent articles “Solar Eclipse Resolution and Why I’m Watching $RSX” and “The Hurricane Harvey Trade Nobody Is Talking About…Yet.”
In the resolution article, I noted/proved that what financial astrologers have spoken about (longer than I have) and that the general pattern solar eclipses cause on the market had done as predicted; $VIX spiked up leading up to the eclipse and then started to come back down soon after it was over.
Russian Stock Markets and the 2017 Solar Eclipse
However, I also pointed out the following with regards to the Russian Stock Market’s likely delayed reaction to the eclipse because of where it was with regards to central and strongest band of the storm. Here’s an excerpt:
What happened with the Russian Stock Markets After Those Comments?
That article was posted on August 22nd; let’s see for ourselves [the vertical red line is when the first full eclipse could be seen on the band it was visible from….the trend-line is from my post through Friday].
So a nice 6% move on the underlying equity [(21.59-20.30)/20.30].
The options I had been eyeballing were the NOV17 $21 Cs. At the time of the post they were trading with a spread of .51 x .54, so lets round up and call the mark $0.53…..they closed Friday with a mark of $1.10 (spread $1.01 x $1.19).
That trade would’ve netted a 107.5%.
I’ll be honest, as much as many of you are skeptical of this sort of financial astrology thing….I’m still playing around with testing this stuff too. So I only took on a small equity position in $RSX and am happy with the 5.7% gain I took home. I’m out of 2/3rds of that position at this point, but being paid to learn about market eccentricities is pretty cool to me, so maybe next time some sort of astrological signs line up I’ll take on the risk of those options.
Oh yeah, Natural Gas….
That excerpt above spoke of Natural Gas. I sent an Unusual Options Alert via my free text service on August 31st…
This is a trade I did take, entering @ 1.50 (price at the alert). I closed 3/4 of that position near Friday’s high of 1.83 (I got out at 1.79). An essentially overnight gain of 20% is something I won’t argue with. Especially with most of that move being based on speculation. If they were shorter expiry I would’ve closed the entire position. If the move hadn’t been purey based on speculation regarding Harvey.
Oh wow, two of your picks worked out well this week. Good for you!
That’s not my point. I like to have ‘edge’ when it comes to trading; something the person on the other side of the trade isn’t looking at.
As I said in the intro paragraph to this article, I wanted to talk Harvey too. Before I do, isn’t interesting that the effects of the eclipse I mentioned correlated with the inception of Harvey as well. With the graviational forces that were altered by the eclipse, I have no doubt some of Harvey’s impact was strengethed, or at the very least impacted, by that solar event.
Hurricane Harvey and Bank Stocks
I don’t want to be too repetitive here, so I’ll make this section quick. Vertical red-line is when I posted the article about Harvey having some sort of impact on bank stocks. Uncle Warren’s disclosure of his $BAC warrants obviously helped alot there…but even the timing of that disclosure has some sort of corrolary to my agreement with the thesis that lunar and solar events impact our psychology (and hence our behavior as well).
I took exposure to this one via $XLF SEP17 $25 Cs and $GS OCT17 $240 Cs. I also averaged down my $C SEP17 $70 positions. Took a little bit of XLF and GS off the table, but not much (1/5th position scale outs).
Don’t ever throw things away because to you they seem to lack sense; do some investigating. Find some potential edge.
That was my major point with this follow-up post, as well as the exploraty ones before it that I’ve referenced back to.
Frankly, I do have an easier time acccepting the instrinsic power of an eclipse versus the power of an analyst upgrade from a firm or bank with holdings of the stock being rated.
Maybe that’s just me.
Enjoy your Labor Day weekends and stay safe my friends.
Houston and the other affected areas, my thoughts and prayers go out to you. For those of you looking to donate to the Houston cause, Josh Brown, who runs thereformedbroker.com blog (one of the best investing blogs on the internet, has an excellent post he wrote earlier this, week entitled: “How you can help Houston evacuees in under 30 seconds“. I’ve donated to the cause via the site he recommends once already and might be doing again soon.
Until next time…stay thirsty my friends.