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Larry Berman: Speculation in call volume hits all-time extremes

Larry Berman: Speculation in call volume hits all-time extremes VIDEO SIGN OUT With options expiring this week, we wanted to have a look at the impact it’s having on markets. It’s huge. In the past week we have seen all-time call volume records challenged (viewers can follow the CBOE data here). It seems the new stimulus cheques are finding their way into Tesla Inc. call options and others. Speculators have had a voracious appetite (call it FOMO plus leverage) and they have been using call spreads and other speculative strategies to add huge leverage. This effect gets magnified around options expiry dates.

Larry Berman: Valuation for U S large caps has never been higher

Larry Berman: Valuation for U.S. large caps has never been higher VIDEO SIGN OUT Historically, the last show of the year I do my fearless forecast for the coming year. This year, it is a bleak from a pure valuation perspective. But from a liquidity perspective, it’s up, up, and away. Our first table shows the Street has an average 23.69 multiple on 172.50 gives you an average S&P 500 target of 4085 for yearend 2021. JP Morgan is the high at 4,400 with several at the low of 3,800. The historic average is 16.5 and even if we account for the cheap cost of money and call it a 20x fair value multiple, we struggle to get to 3,500. The market closed last week above 3,700.

Larry Berman: Seasonality in Biden s first year could surprise euphoric investors

Larry Berman: Seasonality in Biden s first year could surprise euphoric investors VIDEO SIGN OUT The next indicator in my PRO-II (Pro-Eyes) series looks at seasonality patterns. Like many indicators, they tend to be relatively short-term in nature and scope. Seasonality is one such indicator. This can be helpful for tactical trades or timing potential entries into expected periods of weakness. You have probably heard of the “Sell in May and go away” seasonal pattern. It stems from the period of weakness we tend to see in May and September. But there are significant differences in seasonal patterns based on how U.S. markets react to each four-year presidential term.

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