9.3 C
New York
Thursday, March 28, 2024

Thrilling Thursday – Back to the Top at 2,440 – Time to Short Again

The markets will go down again now

The reason doesn't matter – just that 2,440 is our magic number at the top and it's been a reliable shorting line since early June.  Yellen's testimony yesterday was a very silly reason to have a rally – she said the same things she's been saying all year, neither more hawkish or more doveish than she was when the S&P was 10% lower than it is now.

This is right where we thought we'd be as yesteray, at 9:09 am, in our Live Chat Room, I said to our Members:

On the indexes, 2,440 on /ES is our current shorting spot and we can see that's going to line up with /YM 21,500, /NQ 5,775 and /TF 1,425 so we WANT to short /ES at 2,440 as long as the others aren't breaking over and if ANY of them break over, we stop out of /ES and wait for at least 2 of them to cross back under and then short the laggard.  

The Nasdaq plowed up to 5,800 but the other indexes are right where we want to short them and the Russell (/TF) is our favorite short, at 1,425, moving $50 per contract (we prefer 2) per point in our favor.  Whenever the answer to "Why did the markets make all-time highs today?" is "no particular reason" – then it's a good time to short.

Speaking of shorts, you're welcome for yesterday's idea to short Oil (/CL) Futures, which hit our $46.20 target on the button and gave us a nice run back down to $45 for a $1,000 per contract gain and Gasoline (/RB) hit $1.50 for a $1,470 per contract gain and now we're back off the shorts as we're heading into the weekend where we're actually hoping Oil and Gasoline is pumped higher so we can short it again.  

Not much happening today but Target (TGT) interestingly raised their guidance "as a result of improved traffic and sales trends through the first two months of the quarter."  That suits us as we're long and it's a big raise from $1.06 to $1.15 and shares are up over 5% pre-market.   Expect a lot of retailers to bump up on that news today and we like GME, GNC, LB, M, RH, SKX, WMT and, of course, TGT.  In our Options Opportunity Portfolio, our recent trade idea was:

That trade cost us net $3,125 in cash and will pay $8,750 for a net $5,625 (180%) in profit if TGT is over $52.50 in Jan of 2019.  Notice we took advantage of the silly dip down to $50 in mid June and made a nice, conservative play on a stock we really wouldn't mind owning at net $45 if it went lower.  As it stands, we regret not having a chance to double down but we'll take the $5,625 as a consolation prize (we were more aggressive in our Long-Term Portfolio and Butterfly Portfolio).  

If you want to make a general trade on Retail into Earnings Season, the Retail ETF (XRT) is way down at $39 and that means you can pick up the Aug $39 (0.95)/$40 (0.50) bull call spread for just 0.45 and, if XRT gets back over $50 into Aug expirations (18th) you will make 0.55, which is over 120% in just 40 days! 

That's a fun way to play a recovery in retail without risking any particular stock – though we're very happy with our list…

 

124 COMMENTS

Subscribe
Notify of
124 Comments
Inline Feedbacks
View all comments

Stay Connected

157,452FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

124
0
Would love your thoughts, please comment.x
()
x