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Revolution Begins: Market Decapitated! (XLE,SPGI)

Posted on October 8, 2020

Got a birthday coming up?

Wedding anniversary?

Pseudo-religious, year-end gift-giving celebration?

We know, you’re sitting in the sukkah having a tea, so it may not be an opportune time to importune with such matters.

Just a heads up.

Consider the gift that keeps on giving – a subscription to A Jew and His Money.

We’ve a number of options, each priced specifically for your budget.

And they’re all found here –

Top o’ the website, under the Membership Tab.

Call it a “Plug”

Action today on a number of fronts – including the Russian, where it appears Hilarity Clinkton is about to face the music…

 

OK…, so maybe not.

Anyway, we’re moving on one open trade, so grab your pencil case and forage for something that writes.

We Begin…

We set this sucker up way back on April 27th in a note we entitled Shooting Oil in A Barrel.

It was a subversive call – and not a little contentious.  With oil trading “negative” we suggested you swoop in like a ravenous beaver and sell the XLE January 15th 40/45 CALL spread for a credit of $1.11, and then use those funds to buy the USO December 16th (2022) 3 CALL for $1.20.  Total debit was $0.09.

Today, with oil in the doldrums, the short XLE 40 CALL sells for $0.23, and we’re recommending you buy it back, leaving open both the long USO 3 CALL and the long XLE 45.

The two have a net value today of $0.92.

 

Our trade today is based on a continued, near-term negative outlook for markets and an imminent head-chopping for S&P Global Inc. (NYSE:SPGI).

KOOCHEE! KOOCHEE!

You may have heard of SPGI – they’re the capital markets people who sell information and data to investors.

Fundamentally, the stock has some interesting numbers to offer –

  • P/E is 33.4,
  • Dividend Yield is 0.76%,
  • P/B is 407.9 (they’re an information company, you know).
  • Oh, and insiders dumped $20 million worth of stock just as price was topping in July and August.  That represents 18% of their total holdings.

Now look at the daily chart –

Technically

Maximum loss on the trade is $3.60.

Maximum gain is $6.40.

Many happy returns,

Matt McAbby

 

3 responses to “Revolution Begins: Market Decapitated! (XLE,SPGI)”

  1. Jim Rodgers says:

    Hello Matt
    Do we need to do anything with spgi today?

  2. Matt McAbby says:

    Hi Jim,
    The quick answer is, no.
    If you set the trade as specified, you should see a credit of $1000 in your account as soon as the trade clears.
    That may take a day or two, depending upon your brokerage, but your account should already reflect the new balance.
    Hope you made off well!
    Matt

  3. Jim Rodgers says:

    Thanks for the reply Matt!

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