Hola amigos! 

Happy belated Labor Day! I hope you had a great holiday weekend with family, BBQ and summer vibes. I’m coming back this week after an amazing vacation trip to Dominican Republic were we spent almost a week with some friends from Argentina and Italy. We are truly blessed to be able to do this kind of things, and keep building memories with the loved ones even if they are far away. I leave you a pic here so you see by yourself the beauty of Mother Nature at its finest...Yes, I took that picture. And no, it does not have any Photoshop. #Nofilter. 

During my last blog (LINK) I talked about the “Cold Shower” effect. The importance of understanding the big picture, the current market condition and the FED actions, and getting ready to surf the bear market whenever it comes. Well, little did the market care about neither my blog, the FED, Trump, Elon, Cold-Shower, nor anything else…it keeps breaking resistances.  

The market broke to historical new highs two weeks ago, and last week it actually gave us a nice little pull-back. Let’s pick a few set-ups and be ready to play in case it swings back up. Last week fight between bulls and bears was a tie, and although it looks like nice pull back opportunity is forming, remember that confirmation is key! And so is patience…most of this week’s picks are sort of a waiting-in-tiger-position type of deal. Let’s check them out. 

SPWR & FSLR 

I do not like how Solars closed last week. So folks, if you own them or have credit spreads on it, please plan for the worst just in case. Both SPWR and FSLR closed below previous (very strong) resistance levels, which got me a little worried. The last 30min of the market I covered my SPWR position and did nothing on the FSLR naked-put which expires in two weeks. I will evaluate how the market moves Mon-Tue and decide if I want to take assignment or exit with a break-even or minor-loss. Stay alert. 

TSLA 

Well…Now we understand where Elon got his $420 price from. The truth is: the higher Elon gets, the lower the stock moves. The poor guy is definitely in a moment in which everything is used against him. I watched the Joe Rogan show and he didn’t do anything super crazy, but when you are in the eye of the media, even a small thing can be used against you. And definitely smoking weed in a show. Stock price gapped down almost 7%, and is now sitting below two very strong support levels, $300 and $280. Next stop could easily be $245 when previous resistance is found.  

I will most likely stay away of it for some time. I have a feeling that Elon won’t last much longer in his CEO spot, let’s see. 

NRG 

This is another one that I’ll keep a close eye on this week. Nice break out of $35, retraced a little deeper than expected but closed Friday in green. Me personally like a stronger confirmation after a pull-back, and after that I may issue naked puts or a bull-put spread around $33. Nice set-up. You can also buy shares and let it run a bit before covering. 

AMD 

This one has been absolutely on fuego. Last blog we mentioned it was consolidating around $20 with some momentum for a potential break out. Well…it sure did. I had naked puts that I was able to take profits quick once it broke that barrier, and re-issued last week with a $22 strike price. This year so far AMD has broken every resistance, the weekly chart is impressive. I am usually a little bit hesitant to play such an extended trend; I rather wait for a little breather before it continues to run. It looks like right now it is forming a small high base around $27ish so hopefully that’s it and then keeps running. Definitely a +2 or +3 bias, and will be a good candidate to play the retracements. Watch out; don’t get greedy just because you’ve been profitable with the last few trades on it. This puppy moves. 

X & FCX 

These two guys have violated some serious support levels. Both broke below strong supports that previously served as a rebounding platform many times, then bounced back as when a kid leaves the house to go play with friends, but forgot to kiss mamma so quickly returns, kiss her, and run back out . Well, they both kissed supports last week and are bouncing south again. These two going down at the same time that almost the entire market is hitting new highs, is not a good sign. That, and Trump is cooking deals with NAFTA to reduce/eliminate the steel tariffs to Mexico (confirmed) and potentially Canada, which would bring back competition for US Steel. So I’m staying out of these two, unless they show significant weakness this week, in that case we could play them with bear-call spreads and extract some cash to then park elsewhere. FCX actually looks like a nice bear-call candidate for this week, that would be one way to play it. At the end of the day, remember that the system asks for taking money out of the bad guys, wether is with one strategy or the other. 

GDX/SLV 

Don’t like the set-up to do anything right now. All I am doing is actually saving some cash so, as soon as I see some signs of weakness on the USD and rebounding of metals and commodities, I can buy some physical Gold for cheap !! 

 Environmental Education 

At this point we are all very well aware of the lack of Financial Education in our systems. Not only in the schools and colleges, but also at home. If we are part of this community, well that’s a big step towards changing that trend. We want to learn, to evolve, and most important to be able to protect our money and teach our loved ones to do so as well. But, what are we doing for the place we live in?  

I believe that a big part of all of us embracing Financial Education is that we get to see and enjoy the results first hand. A few years of study and creating healthy financial habits can lead to great results in a relatively short period. Definitely within our life-time. Now, what if I told you that you would spend a lot of time learning and becoming financial savvy but for future generations? That you would not see a dime for you? That all your learnings and investments would save your grandsons and granddaughters but would not change your life at a very minimum? Would you still do it? I don’t expect you to tell me, I know the answer, at least of the majority.  

We all know very well the (negative) impact we do every day in the environment. When we drink water in a plastic bottle instead of a glass, when we have a coffee in a cardboard cup, when we use 20 plastic bags at the supermarket instead of re-using them, when we take a 20-min shower, when we leave the AC on even if we’re not at home. The list goes on and on, and I’m not even talking about the big impactful things such as destroying forests, building factories, using pesticides, etc. I’m am just referring to small daily behaviors that would not change a thing in our life if we do it the right way, and yet we do it the wrong way. And why? Why is it that we are not environmental conscious if it takes such a small effort? I’ve been thinking about this for a while, and particularly (no offense, please) since I moved to the US where the levels of waste are, let’s say, a little bigger than in most of the places I’ve been.  

I have come to a conclusion…I strongly believe that the reason why most of us don’t take actions towards reducing our footprint and ensure sustainability for future generations, is the following: We do not see the results of those actions in the short-term. We just don’t. We know is the right thing, we know will help years to come, but honestly it will not change our life. And that’s scary to think of. 

This is a big part of my WHY of writing this blog. Environmental Hedging is a way to get people on board of the green move. And for those who need a stronger reason than just “help future generations” to change your habits, well…here you have it. You will make money on the way. Moreover, you will take money out of dirty companies and put it in clean ones to work together with us on helping the cause. And then you will make more money to be used to travel, help, build a garden, buy solar panels, etc. I think it’s a good deal, don’t you? 

Now, let’s all go change our bad habits and teach our kids about it too. And make money on the way… 

Cheers, 

Franco.