Markets to move higher, but downside protection is reasonably priced – Scott Bauer joins Alpha Trader

This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher chatting with Scott Bauer, CEO of Prosper Trading Academy.

Among the topics covered:

  • Barring worsening news on the Delta variant or some other unfortunate event, there’s little standing in the way of the market continuing to move higher, says Bauer. That doesn’t mean investors shouldn’t be buying protection, and – thanks to recent low volatility – that protection is relatively cheap at the moment.

  • Recent strong economic growth and inflation prints suggest we’re maybe nearing the end of the zero rate regime sometime in the next year, but Bauer believes the market has discounted as much. More important is how to play stronger inflation, and Bauer – who has been long semiconductors (SMH) through their big run of the past few months – believes there’s plenty more upside to come.

  • Markets don’t always have to make sense, reminds Bauer. U.S. bond yields until recently had been headed sharply lower, but at the same time the dollar was showing plenty of strength. Apparel stocks have been taking off of late, even amid stores about companies extending work-from-home, and chatter about at least some schools continuing with remote learning.

  • And of the dollar (USDOLLAR), Bauer expects it to continue rising – not because its a “bastion of strength” – but because it’s being measured against other currencies like the euro and yen that have even larger flaws.

Links of interest:

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