In our next segment. Trader nation brought to you by direction
efs we explore how investors and traders can position their
portfolios for the future with directions expanded sweep of.
So joining me now is
a
managing director and head of sales distribution and alternatives at direction
with bank earnings that take center stage this week.
How are traders positioning themselves?
Well, certainly you have the big banks on one hand,
which is the financial select sector index or the S and P
and then you have the regional banks.
So I'll bifurcate those two through the S and P regional bank index.
So far,
the big bank earnings have been
fairly strong excluding Goldman Sachs today because
of focus more on their trading revenue and their commercial real estate.
But so far the big pop has been in the S and P regional bank
index
nine out of the top 10 stocks within that index report today.
So we're seeing a lot of interest in our
triple leverage bull DPT of the regional banks.
And we've seen more two way action in the broader
financial select sector index which includes the big bank.
Banks are triple leverage bull and bear there,
which is
one of the things to keep an eye on with the regional banks.
Two things actually are whether or not
you'll see a slowdown either in deposits coming
out of those banks or hopefully seeing
some increase in deposits quarter over quarter,
particularly with the regional banks.
So as we approach at the next fed meeting at the end of the month,
we do see traders sentiment on interest rates.
It's interesting we continue to see bond traders from a short term perspective
looking for rates to go down, especially on the long end of the curve.
We have a triple leverage bull on the 20 plus year treasury TMF.
People can also play the other side which is TMV
the inverse when you look at the fed fund futures,
it looks like it's baking in
a rate hike next week.
Have a lot of traders taking both sides of the trade in anticipation of what the fed
has to say more of their forward looking guidance
that's going to occur next Tuesday and Wednesday,
the economic data recently has been soft with retail sales most recently and CPI
last week.
So we have traders trading both sides of the 20 plus year and
also the 7 to 10 year on the shorter end of the curve
with
and
which is the triple leverage 7 to 10 year
treasury bull and bear as well
with Tesla's strong run up in earnings today.
Do traders think that this rally is sustainable.
Well, certainly, you know,
we just crossed a billion dollars in our 1.5 times leverage Tesla
TSL. So the sentiment continues to be bullish on trading Tesla.
The headlines have been for the most part, pretty positive,
but certainly with Tesla being up over 130% year to date,
take, it is certainly overbought on a short term basis when you look at RSI.
So we have a number of people that are taking the other side of the trade,
which is on non leveraged inverse on Tesla, which is
TSLS
either to try and hedge the big gains that they've accumulated this
year or to take an outright trade short in anticipation of maybe
earnings being a little soft. One of the things to keep an eye on for Tesla
this
this evening for whether you're bull or bearish is certainly margins and
also the continued market share that they're taking in the space.
Let's turn to health care.
What near term catalyst and should traders be looking at in the health care space?
Well, uh when you look at the health care space,
most people look at the S and P health care select sector index,
we have a triple leverage bull on that cure.
The top three stocks within that index include United Healthcare,
which just got an upgrade from Bernstein yesterday.
Johnson and Johnson
uh is gonna report earnings tomorrow which should be
uh at least representative to the broader group,
maybe you'll push it one way or the other.
Uh And then you have Eli Lilly,
which is uh just announced some progress with their Alzheimer's drug.
So those are the top three ratings within the health care sector.
It's been a struggle recently for that space as a whole. Maybe those three
that spearhead that index will be the impetus for some upside.
And let's finish with Netflix.
Always a big mover after earnings, whether it's to the upside or the downside.
How can traders take advantage pre and post earnings announcements
on Netflix and the impact perhaps on some other sectors?
Yes, certainly Netflix.
Tonight, people will be watching subscribers growth as always and
regarding the password restrictions that they've placed with users,
how that's going to impact it and add revenues as well.
A couple of ways to play it.
There's some broad indices, the Dow Jones Internet index, we have web
web
which is triple leverage bull and bear that includes Netflix. In addition to that,
the Fang Plus stocks, we have a two X bull that includes Netflix
on the Nice
Fang plus which is FNG. So there are a number of ways you could play Netflix
as a proxy within a broader index, which includes it.
All right, Ed
Alinsky,
managing director and head of sales distribution and alternatives at direction.
Ed. Thank you.