consistency plus time | Outlier Insights
Welcome to Outlier Insights!
Each week I work hard to gather and curate information for your convenience. There are two main topics to the newsletter:
Market Analysis is where I share 15 high summary points for the market from the week prior.
Erik’s Brainstorming is where I share a couple ideas to watch each week along with my perspectives; often market related, sometimes not.
If what I do helps you out, please consider either subscribing on Substack or joining the Patreon to support my work and join the Outlier Community! You can also simply share the content, which is a big help as well.
Be an Outlier!
-Erik
Announcements
Outlier Community Updates:
So far this month, traders in the Outlier Trading Challenge have refined their trade analysis checklists for general positions and a specific strategy. Next was to analyze a sample of recent trades tied to that strategy and measure the effectiveness of the strategy specific trade checklist. Building efficient processes is key.
Friday we discussed the next Outlier Options Trading Bootcamp mini series. The plan is to take a closer look at the greeks. We’ll spend an episode on each of the primaries to tighten both our theoretical and practical understanding. Make sure you’re subscribed on the YouTube channel to join in!
The next Outlier Pro Plus Zoom workshop is 21 July at 5pm PT! We work through live market analysis and trade building scenarios. For those interested in joining at the promotional rate: https://www.patreon.com/OutlierTrading
The weekly Pro Skill Development for this week will deep dive a couple recent trades, to review my ended to end trade process.
Outlier Pros can check out the weekly schedule of events here: https://www.patreon.com/posts/134518446
Links.
Outlier Pro Patreon - Transform your trading & build a robust approach
Outlier Trading YouTube Channel - Daily Livestreams & Weekly Videos
FREE Outlier Community - Community, education, information
Latest Videos Playlist - Erik’s most recent YouTube videos - released every Sunday
1. Market Analysis.
New Records: The S&P 500 and Nasdaq Composite closed at all-time highs.
Strong Weekly Gains: The Nasdaq rose approximately 1.5% and the S&P 500 gained about 0.6% for the week.
Earnings Season Begins Strong: The start of Q2 earnings season was a primary catalyst, with many companies beating expectations.
Banks Beat Forecasts: JPMorgan Chase and Citigroup reported better-than-expected Q2 results, boosting the Financials sector.
Inflation Data Soothes Nerves: The June Consumer Price Index (CPI) came in-line with expectations at +0.3% month-over-month and +2.7% year-over-year.
Wholesale Prices Cool: The Producer Price Index (PPI) was flat month-over-month, suggesting a potential easing of inflationary pressures in the production pipeline.
Consumer Spending Rebounds: June retail sales rose a solid 0.6%, indicating consumer resilience.
Nvidia Gets Green Light for China Sales: The stock rallied after receiving U.S. approval to sell its H20 AI chips to China.
Netflix Beats, Stock Dips: Netflix surpassed earnings and revenue estimates and raised its sales outlook, but the stock fell in a "sell the news" reaction.
United Airlines Flies Higher: Strong quarterly results from the airline pointed to continued robust travel demand.
Health Insurers Under Pressure: Elevance Health's stock plunged after it drastically cut its profit guidance due to rising medical costs.
Sector-Wide Impact: The negative news from Elevance dragged down other managed care stocks.
Fed Chair Drama: Mid-week market jitters were sparked by a quickly debunked rumor that the President intended to fire the Federal Reserve Chairman.
Treasury Yields Stable: Despite the economic data and political noise, yields on U.S. Treasury bonds remained relatively stable.
Looking Ahead: The market will be watching for earnings from more tech giants and further commentary on the economic outlook from corporate leaders.
Economic Events for Next Week.
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2. Erik’s Brainstorming.
Earnings season is well underway. This is a primary profit mechanism I target to create non-correlated returns to my broader portfolio.
So far, this cycle has been very productive. Win rates are strong but more importantly, the inevitable losing positions have been controlled. Not seeing wildly outsized moves just yet. Markets in general have been robust, with healthcare continuing to lag. Biotech has been performing relatively strong to the broader sector.
I’ve been sharing a small write up each day in the discord (completely free to join!) to collate general thoughts. I want to share a section here.
I was reviewing my analytics for the YouTube channel out of curiosity and came across an interesting metric. I’ve created more than 1,100 videos and 670 livestreams over the past 5 years. The average video takes 3 hours to create and record. The average livestream takes 4 hours.
For those keeping score, that’s 3,300 hours on videos, 2,680 on streams - 5,980 total (not including all the ancillary backend time). Thats ~1,200hrs/year equaling over 3 hours each day on average.
The interesting thing is, for those that were around in the beginning of the channel to now, you likely have seen a significant shift in approach and quality. As most of you know, I do not prioritize “YouTube” skills or channel growth - these are secondary efforts.
My main effort is and always will be to share quality, no bullshit information. This analysis felt relevant here because it’s a similar, less relative intensity approach I’ve taken to mastering trading. It begins with starting something, seeking process improvements, building experience, and not stopping.
Consistency is a superpower we all have access to if we successfully prioritize. The growth I’ve experienced over the last 5 years should be similar to what you as traders will have experienced, especially over the last 5 years with me.
Our community takes a hybrid approach to trading based on my learned experience. Like YouTube, I started trading in 2007. The first 8 years, i treated it as a lifeline. I spent countless hours, I estimate absolute minimum 4 hours a day on average. I have logs that show plenty of 8 hour days during college.
Yet, I in no way would consider myself at that point an expert, even though I would’ve exceeded the 10,000 hour mark. My learning was the absolute hard way. I was grossly inefficient. Something I strive to provide a different experience for you. In trading, we can cram hours into fundamental concepts and massively fast track it.
For options trading the focus areas are quite simple in the beginning. First we need to master the fundamentals of basic market operations and options.
A comprehensive understanding of HOW options behave is a non-negotiable. This requires accepting in the near-term your progress will not be as fast as you hoped and the millions of dollars aren’t going to roll in right away.
Second and in parallel, profit mechanisms are the next focus. These are the underlying market effects that we can monetize. I have a video breaking this concept more in depth coming soon.
Be effective with your time but remain consistent. You will be surprised as what you can achieve.
Be an Outlier
Erik
DISCLAIMER:
The content presented is for informational purposes only and any opinions, news, research, analyses, or other information contained are provided as general market commentary and do not constitute investment advice. Outlier Trading, its affiliates, and employees are not responsible for any investment decisions made based on the information presented. We do not guarantee the accuracy, completeness, or reliability of any information presented and are not liable for any losses or damages arising from the use of or reliance on this information. By accessing this content, you acknowledge and agree to these disclosures and terms of use.