Posted on July 11, 2022
We’re backing up the truck today for a haul of cash – not gas or Bitcoin or anything else that’s value-deranged.
But before we get there, we have one to close for a very handsome return.
It’s our ACI trade, which appeared in your inbox on June 15th in a dispatch called The Early Bird catches… the Monkey Pox.
The trade urged you to sell the ACI July 15th 27/29 CALL spread for $0.95 and buy the ACI July 15th 29/27 PUT spread for $1.05. Total debit was $0.10.
The CALL spread can be repurchased for $0.60 (0.65/0.05) and the PUT spread sold for $1.25 (1.95/0.70).
Execute and you walk with $0.65 on just $0.10 spent.
And that’s a 550% return.
In under a month.
Chances are you’ll pocket a good deal more, because S&P September futures are down before the open by 25 points as we write.
Good on New Zealand Blake for taking on multiples of the trade.
And now we sit down with Mr. Cooper (NASDAQ:COOP) the mortgage machers from Coppell, Texas, who will steal from anyone who’s interested in buying, selling or otherwise transacting business in relation to a single-family home.
And fundamentally, you never saw a company look so good!
It appears investors are pricing in a top in the housing market, as the charts (below) will show.
This is the daily –
Here’s the weekly –
The technicals here are equally damning…
And that’s our expectation in crafting the following –
A Jew and His Money recommends you consider setting the COOP September 16th 40 synthetic short* for a debit of $3.00 (2.00/5.00). Set a STOP buy on the shares at 40 to avoid any runaway losses.
Rationale: the trade offers a maximum theoretical gain of $37.00 (should COOP go bankrupt), and
A max loss of $3.00.
Breakeven occurs at $37.00 – $0.35 below the stock’s current price (just nine tenths of one percent).
The STOP is set above the descending short-term (daily) moving average, meaning there’s less of a chance it will be triggered.
In the event that it is, however, we’ll need to reset a STOP sell at the same level (40) to keep the trade square.
And if that’s tripped, we’ll have to reset another STOP buy there, ad infinitum.
An open STOP must remain in place until the trade is closed or we reconfigure for an early profit.
The G-d of Israel is with all those who stand the test.
Who don’t give up.
And who are on the side of kedusha and Truth.
With kind regards,
Hugh L. O’Haynew