MTM Options Trader Newsletter - The Sunk Cost Fallacy: Why You Are Holding on to Your Losers

This Week in the Market Despite several big-name stocks losing ground after reporting their latest round of earnings, the market was able to push higher yet again last week. All three of the major indexes set all-time highs last week. As has been the case over the past couple of weeks, all three were well above their 50-day and 200-day moving averages. The market continues to shrug off any inflation talk as a smaller infrastructure bill looks like it may have a shot of being approved soon. Implied volatility levels ticked up a tad but remain relatively low. A continued bullish to non-bearish sentiment for the overall market seems justified for now, barring any unexpected downturns. Although many major companies have already announced with mixed results, plenty have yet to report. In addition, this week is full of economic announcements. The Federal Reserve is set for another meeting and despite the members most likely not moving rates, inflation talk continues to heat up. The Fed members' language and thoughts about moving rates higher in the future may affect the performance of the market afterward. Not to be outdone by the Fed, the latest jobs report is expected before the open on Friday. Have a healthy, safe and prosperous week!

Nov 1: Construction Spending Nov 3: Factory Orders Nov 3: FOMC Announcement Nov 4: Jobless Claims Nov 4: International Trade Deficit Nov 4: Productivity and Labor Nov 5: Unemployment Nov 5: Consumer Credit Read Our Blog

The Sunk Cost Fallacy: Why You Are Holding on to Your Losers "The stock is down 25%. But I didn't lose money because I didn't sell it yet." That's a quip from a conversation I had with a friend in a London pub a while back (her talking, not me). From there the conversation ultimately finished with an "I agree to disagree" ending. I told her she should ask her broker for that money she "didn't lose" and see what happens. I still didn't get through. But, you know, I can't blame her for thinking this way— Continue Reading ... MTM Watchlist Here are a few trade ideas we will most likely break down in group coaching class this week: GS – After a couple of successful call credit spreads on the stock with resistance around $415, we may consider more as well as an iron condor. FB – After a successful calendar spread around the 200-day moving average this past week, we may look at more if the stock continues to hang at the moving average. AAPL – After gapping lower on earnings, the stock raced higher to close out the week. A push above the $150 level could trigger some bull call spreads.

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