Results Week Ending 2/5/21
I would like to start this week’s report acknowledging today being Super Bowl Sunday. Did you know there is a connection between the Super Bowl and the stock market? Believe it or not, there is a thing called the Super Bowl Indicator.
According to Investopedia, the Super Bowl Indicator is a non-scientific stock market barometer. Well, I’ve been saying it for years with my teaching that NO stock market barometer is scientific. If there were a few scientific barometers we would all be rich. However, this does not mean we can’t have a little fun with this “Super Bowl Indicator.”
The premise of the Super Bowl Indicator is the theory that a Super Bowl win for a team from the AFC foretells a decline in the stock market (a bear market) in the upcoming year. Conversely, a win for a team from the NFC means the stock market will rise in the coming year (a bull market).
Leonard Koppett, a sportswriter for The New York Times, first introduced the Super Bowl Indicator in 1978. Up until that point, the Super Bowl Indicator had never been wrong.
Before I continue with a few stats, you must understand, as a means of predicting the stock market, the Super Bowl Indicator is completely irrelevant. There’s no reason to believe the winner of a football game dictates the performance of the stock market.
Having said that, what the indicator tells us is that if the Kansas City Chiefs (AFC) do a repeat of last year and win again, the S&P 500 will go down. Now last year, despite that Feb/March drop early in the pandemic, the market ended being up 15.7%. Since 2008 the indicator has been wrong 8 of 13 times. Not so reliable. But, push it out 54 years….. continue reading.
As of January 2020, the indicator has been correct 40 out of 53 times, as measured by the S&P 500 Index. This is a success rate of 75%. It failed to predict a down market in both 2016 and 2017, when the Denver Broncos and New England Patriots, both AFC teams, won Super Bowls. Also, in 2008, despite the New York Giants (NFC) winning the Super Bowl, which supposedly indicated a bull market, the stock market suffered one of the largest downturns since the Great Depression.
The Super Bowl Indicator is an example of purely fun sports writing. There is no real connection between a football team in a particular league and the U.S. stock market; so, any relationship that can be drawn between the two is purely a coincidence. What began as an interesting news column many decades ago continues to make a new, fun headline once a year.
Another thing I’d like to talk about is the David and Goliath story that has been in the news lately. The Reddit chat room driven market volatility has been compared to the David and Goliath biblical story. The small guy beating the big guy. The small trader working on Robin Hood beating up on the mighty hedge funds.
In case you haven’t noticed – I know some have because I received emails – this has been my mission for many years, hence the name Main Street beats Wall Street. I started this site in 2016 trying to get the small guy that lives on Main Street, USA to believe they can beat the big guys that work on Wall Street. Unlike the Reddit group, I don’t want to put them out of business, I just want to take some of their money. Nice and slow! I don’t want to cut their head off, maybe just a finger so they continue to bleed money our way for many years.
I never really cared if my subscribers went to huge numbers. I just wanted to help the ones who did sign up. Well I’m changing my mind. Reddit proved what can be done with large numbers. The way I look at it I only need 1 million new readers lol.
So, everyone please get to work to help. Tell a few friends to sign up for Main Street beats Wall Street and let’s build our army. With large numbers we can siphon Wall Street dry and have more and more people who live on Main Street, USA living a better life and have security for their families.
If that doesn’t inspire you maybe my numbers will. So far my weekly totals have been nothing less than amazing. I believe I’ll continue being successful but imagine the work we could do if we had huge numbers of people making the same trades. Call me crazy, but I’m a believer!
Here are my weekly totals starting with the 1st week of the year. $31,250, $37,291, $33,548, $31,546 and this week $27,300.
My account is growing because I’m trading with more and more money, which worries me. No one knows when it’s coming, but there is a correction coming. I’ve decided to back off a little. Remember, greed will always get you. I’m going to try to limit my weekly gain to $10,000. How crazy does that sound? Imagine having to work hard to limit your income to $10,000 a week.
The way I look at it, if I only take in $10,000 it will be a great income and I’ll be building my non-invested cash to be available for when we do get the correction. This $10,000 will be in premiums only. I might bring in more money with assignments. Let’s watch this week to see if I can practice some discipline and lower my exposure to risk.
Take a look at this week’s trades:
Workhorse
This was one of the Puts I sold this week. The stock went up and the Put expired without the stock being put to me. Money for nothing!
2/2/21 – Sell to Open 10 WKHS 2/5/21 $31.00 P @ 80¢ (+$800)
2/5/21 – Expired 10 WKHS 2/5/21 $31.00 P
Profit +$800
Xpeng
Another Put without assignment.
2/3/21– Sell to Open 10 XPEV 2/5/21 $46.00 P @ 90¢ (+$900)
2/5/21 – Expired 10 XPEV 2/5/21 $46.00 P
Profit +$900
SLV
SLV is a silver ETF. After going up silver came down a bit. I hope I can get a Call sold this week.
2/1/21 – Sell to Open 5 SLV 2/5/21 $27.00 C @ $1.20 (+$600)
2/5/21- Expired 5 SLV 2/5/21 $27.00 C
Profit +$600
Tesla
I was assigned on this 200 shares. 200 shares of Tesla is a large position. This will be the beginning of me stacking some cash for the pullback.
1/11/21 – Buy 200 Shares TSLA @ $840.75
2/5/21 – Assigned 200 Shares TSLA Shares @ $845.00
Profit +$850
2/1/21 – Sell 2 TSLA 2/5/21 $845.00 C @ $12.00 (+$2400)
2/5/21 – Expired 2 TSLA 2/5/21 $845.00 C
profit +$2400
Peloton
I own 5000 shares of PTON. I had a 10 contract Call sold and a 40 contract Call sold. This is the 10 contract Call without assignment.
2/1/21 – Sell to Open 10 PTON 2/5/21 $170.00 C @ $2.10 (+$2100)
2/5/21 – Expired 10 Pton 2/5/21 $179.00 C
Profit +$2100
MOMO
10 contract Covered Call with assignment. This was an At-the-Money Covered Call. I was in it to get assigned for the premium only. But I’ll take the $30 on the stock sale. The premium alone was over a 3% return.
1/13/21 – Buy 1000 Shares MOMO @ $15.97
2/5/21 – Assigned 1000 Shares MOMO @ $16.00
profit +$30
2/1/21 – Sell to Open 10 MOMO 2/5/21 $16.00 C @ 50¢ (+$500)
2/5/21 – Expired 10 MOMO 2/5/21 $16.00 C
Profit +$500
Peloton
This is the 40 contract Call with PTON without assignment. Check out this premium! Hopefully I get another Call sold this week but the premium will be lower because earnings have been announced and the volatility will be lower.
1/29/21 – Sell to Open 40 PTON 2/5/21 $157.50 C @ $4.75 (+$19,000)
2/5/21 – Expired 40 PTON 2/5/21 $157.50 C
Profit +$19,000
SLV
This was the SLV Grasshopper trade. The only Grasshopper trade of the week.
2/1/21 – Sell to Open 1 SLV 2/5/21 $27.00 C @ $1.20 (+$120)
2/5/21 – Expired 1 SLV 2/5/21 $27.00 C
Profit +$120
Total Weekly Gain +$27,300
Remember, try to find people to sign up to Main Street beats Wall Street. With larger numbers I think we can do some good work.
Enjoy the Super Bowl, it should be a good one! If you are a believer of the Super Bowl Indicator (which you shouldn’t be) you want the NFC to win. This would be Tom Brady and the Tampa Bay Buccaneers.
Watch for the Grasshopper Report.
Successful trading,
Steve
The Options Coach