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It's The Final Countdown

Oct. 10, 2016 4:16 AM ETABBV, ABT, AGQ, BX, JPM, MRO, SBUX5 Comments
George Acs profile picture
George Acs


  • Time is running out for an interest rate increase to finally occur in 2016.
  • The coming week may offer a good dose of data and opinion that could provide some further clues as to the possibility of an interest rate increase before year's end.
  • Markets still have to demonstrate that they can accept an interest rate increase for what it really represents, rather than as an impediment to further market gains.

About a year ago at this time, we were all waiting for what would turn out to be the first interest rate increase by the FOMC in nearly 9 years.

Once that increase finally arrived at the end of 2015, we were all preparing for what we were led to believe would be a series of small such increases throughout the course of 2016.

The problem, however, that stood in the way of those increases becoming reality was the FOMC's insistence that their decisions would be data dependent. As we all know, the data to justify an increase in interest rates just hasn't been there ever since that first increase.

The cynics, with the advantage of hindsight, might suggest that the data wasn't even there a year ago, but that didn't stop the FOMC from their action, which in short order took the market to its 2016 lows.

Back when those lows were hit in February, many credit Jamie Dimon, the CEO of JP Morgan Chase (JPM) for abruptly ending the correction by making a $26 million purchase of his own company's shares. That wasn't a terribly large amount of money, but it probably wasn't a coincidence that the market turned on a dime.

Maybe we still haven't returned to your grandfather's fundamentals, but the message of confidence, without using "other people's money," gave a psychological boost to the market, even as JP Morgan shares didn't garner similar benefit at the time.

As we are now in the final quarter of the year and time is running out for an interest rate increase in 2016, it may again be JP Morgan Chase in sharp focus as it gets the next earnings season underway this coming week.

This past week's Employment Situation Report and its revisions didn't do very much to

This article was written by

George Acs profile picture
I am a simple individual investor who believes that the playing field is level, but may require active management of one's holdings. I've devised a series of steps that constitute a highly defined covered option strategy that most anyone can follow and that I've described in Option to Profit (2011). Having retired from a career in Pediatric Dentistry, approximately 10 years ahead of schedule, after spending the previous 10 years working just 2 1/2 days each week, I now spend my time trading.For almost 5 years I alerted others of trading opportunities in large cap positions through the Option to Profit subscription service, a premium subscription service that provided actionable Trading Alerts via text messaging or e-mail at my old site www.optiontoprofit.com. As of January 2, 2017, the site  and the name "Option to Profit" are no longer mine. as I've again joined the dark side and taken the easy money. But I've returned to my blogging roots on January 2, 2017 by resurrecting the old TheAcsMan.com ad supported web site, open to all.That, too, ended and the new, subscriber based LEAPtoProfit.com which launched July 2018 and is geared to the less active trader who is either shifting into a "buy and hold" strategy, as am I in this next to final stage of my investing career or seeks to milk an existing "buy and hold" portfolio.Current;y. the LEAPtoProfit p[ortfolio is fully invested and the paywall has been removed until December 2019 when I expect an infusion of cash from position assignments.Ultimately, I hope to make my stock portfolio improve the quality of my life. Whatever stage of life you are in, you can make your stocks improve that quality by putting them to work for you and perhaps LEAPtoProfit can be part of that process.

Analyst’s Disclosure: I am/we are long MRO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I may buy/add shares or sell puts in ABT, BX, MRO and SBUX

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

Doyle3000 profile picture
Thanks for the earwig of Europe's "The Final Countdown". It's been playing for the last 20 minutes in my head.

Well it's hard to explain this BMY trade we discussed a few weeks ago in your article. I purchased at $57 and sold the 10/7 $60 calls. So on Friday I was a genius. Today I'm more the opposite of genius; can't quite put my finger on the word, but maybe idiot works.

So I'm adding 200 more shares, waiting for dividends, and hopefully after it rebounds a bit I'll go back to selling calls. Not the worst stock to be stuck with but man who'da thunk it?

FYI TWTR & CRM are great short term trades. If they collapse, buy and write weekly calls. If they rocket, sell immediately before the next news cycle. Wow those two are volatile!
raykrv6a profile picture
Good read George. I have several lots of BX and MRO. Waiting for BX to turn around.
Hard to believe it's been 9 years since a rate increase.

Bought second lot of UAL stock on Friday and also 54.50 10/14 calls. Sold the calls today for 69% profit. Good for several weeks of groceries and vino.

Finici profile picture

I hope your expectations over SBUX come true. It is a fine comany but has relly lagged over the last year. I was in, got out, then thought: '...well - ok - it's off to the races, then see it drift south again.'

Arrrrgh. (not as neat a word as concomitant, but none the less suitable).

Maybe on a two or thee point pop on the upside, I'll do an in the money. I have another small reserve holding which is set and forget, but I just find this a frustrating company.

George Acs profile picture
Thank you. It's nice that Seeking Alpha makes such an outlet possible
Bim Ska La Bim profile picture
George - thank you for your work here...enjoy your writing style and take(s) on what's going on out there.
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