by Phil Davis - September 26th, 2014 8:02 am
That's how much our FREE Futures suggestions made between the time I put them in yesterday's morning post (8am) and the close of trading at 4pm. That's not bad for 6 hour's work, is it? As I said in the morning:
So, you may wonder, why would we want to go against the wishes of two of the most powerful people and short oil ($93.40), gasoline ($2.75), the Dow (17,150) and the Nikkei (16,350)? Well, that's because, as powerful as these people may be – they are still fighting physics in trying to make the markets do things they simply shouldn't be doing.
I'm sure ALL the newsletters you follow are able to give you equally profitable advice so, by all means, DON'T SUBSCRIBE HERE – especially ahead of the rate increase in October (sorry, inflation). But, can you really blame us for being pleased that we totally nailed the drop?
In fact, had you simply joined us on Wednesday and replicated our virtual Short-Term Portfolio, which was only up 53.4% at the time, you would have caught a ride from there to 60% in just two days. Last Thursday, the STP was up only 30%, so that's a 30% ($30,000) gain for the week as our bearish bets paid off and it very much offset the $15,560 decline in our bullish Long-Term Portfolio. So much so that we took some of our shorts off the table to get us more neutral into the morning (as we expect a slight bounce unless GDP sucks).
You don't have to trade the Futures to make great money on your hedges. Our DXD Oct $24 calls jumped from 0.50 on Tuesday (when I reminded you about them in the morning post) to 0.96 at yesterday's close – up 92% in 3 days! That's a good hedge, especially when you consider the Dow only fell 2.5%, so we got 36:1 leverage on that hedge – and THAT is how we balance our portfolios and protect them from sell-offs.
by Phil Davis - September 23rd, 2014 8:07 am
So much for 2,000 holding.
Fortunately, our Big Chart kept us cautiously bearish into the weekend and the hedges in our Short-Term Portfolio functioned perfectly, gaining $13,000 on the day and completely offsetting the drop of $8,000 in our Long-Term Portfolio.
That's without our big hedge, DXD, kicking in yet, as the Dow is still over 17,000 but, should it fail, we'll see those STP gains multiply quickly.
For those of you who are not Members, and don't have access to our various Member Portfolios (and you can by subscribing here), we have done our best to prepare you for this drop as well. Last Thursday, right in the morning post, I shared our short stance with the general public, saying
It's going to be crazy into the weekend but, in our Live Chat Room this morning, I said to our Members:
Futures pumped back up to yesterday's highs at 17,125, 2,001.50, 4,080 and 1,156.5 so I like shorting below 17,100, 2,000, 4,075 and 1,155 – short the laggard, out of any of them cross back over – very simple!
That's our plan into the weekend. As I've mentioned before, we're also using DXD ($24 at the time), TZA ($14.68) and SQQQ ($35.26) to hedge our long portfolios – just in case things unravel over the weekend. We also discussed FXI ($40.30) puts earlier in the week as a play on China melting down so PLENTY of ways to profit from the downside.
This morning, the Futures are 17,050 on /YM (up $375 per contract), 1,979 on /ES (up $1,125 per contract), 4,035 on /NQ (up $900 per contract) and 1,116.50 on /TF (up $4,000 per contract) – so that strategy went pretty well.
In last Wednesday's post, we also shorted Oil Futures at $95 and oil fell to $91 yesterday – up $4,000 per contract in…
by Phil Davis - September 5th, 2014 7:51 am
That's $2,200 in two days playing with us!
Not bad for free picks, right? On Wednesday, we played the Nasdaq Futures (/NQ) short at 4,100 and those gave us a nice, $700 per contract gain in just a few hours. Yesterday, we reviewed that trade idea right in the morning post (which you can have delivered to you every morning, pre-market, by SUBSCRIBING HERE) and I added:
That's why, today, right now, we are once again shorting the Futures at 17,100 in /YM(Dow) and 2,005 on /ES (S&P) and 1,175 on /TF(Russell). Yesterday we shorted the Nasdaq(/NQ) at 4,100 – a trade idea I outlined in the morning post for our subscribers – and that trade made $700 per contract by noon. Not a bad day's work, right?
Futures trading is a useful skill as we can make adjustments to our trading almost anytime we get some new information – even when the market is closed.
We played bullish on Draghi fever early in the morning and then, in our Live Member Chat Room, at 10:35, we nailed the turn for a re-entry at 1,180 on the Russell (/TF Futures), 17,150 on the Dow (/YM) and 2,010 on the S&P (/ES) as well as $95 on oil (/CL) and we were rewarded with moves down to 1,160 (+$2,000 per contract), 17,025 (+$625 per contract), 1,990 (+$1,000 per contract) and $94.25 (+$750 per contract).
As I said yesterday, we can make trades like this because the market is RIGGED and we understand how it's rigged, which enables us to play along and profit from the manipulation. We don't like it, we don't endorse it but, since it happens every day – we may as well bet on it, right?
Of course there are other ways to make money on pullback and we teach those as well at PSW. Here's a couple of trade ideas we had for our Members recently under the category of Porfolio Protection:
- Member Chat, 8/25: Of course the
by Phil Davis - August 28th, 2014 8:12 am
The Futures are off a bit today and that's no surprise to those of us who have been paying attention to the volume, or lack thereof, as we made our final approach at the 2,000 line on the S&P 500. Jim Cramer was literally foaming at the mouth this week as he and his CNBC co-conspirators herded the sheeple into the markets to participate in the tail end of the rally, where the suckers could hold the bags for their Corporate Masters.
Why am I angry at Cramer today? Because yesterday he committed the same crime he commtted in 2008 that cost so many people their life's savings – he told people not to sell their stocks on a pullback. "Don't take profits" is the message for the viewing public. But, I would ask, if people don't take profits – when will they ever get profits? What kind of stupid message is that? Well, it's the message that leaves you holding the bag while his hedge fund buddies head for the exits. It's not much different than telling one group of people not to leave a burning building while you make sure all your friends are getting out safely.
"This is not just my opinion. I can prove it to you empirically. See, as I was preparing to write my book "Get Rich Carefully," I went over the previous five years of trades made by my charitable trust. And as I reviewed those trades I noticed that far too often, my good judgment would be overcome by excessive skepticism."
If the "proof" Jim is talking about is his Action Alerts Plus, then I'd say you really should think long and hard about following his advice here (via Kirk Lindstrom – who does compete with Cramer):
I guess, sure, Jim legitimately should regret that he wasn't more bullish from 2008 to 2013, when the market popped 200% and his trust gained about 100% but don't you think the lesson Cramer should be taking from that experience is to CUT YOUR LOSSES, not…
by Phil Davis - August 5th, 2014 7:40 am
Actually it's a rule of thumb at PSW that dip buyers need to get burned 3 times before they wise up to a proper correction, so they still have at least another try in them before they finally walk away from this crazy market. As you can see from Oppenheimer's S&P chart, 56% of the S&P has plunged back below their 50 dma in the past 30 days.
This is EXACTLY what I've been warning you about. At the same time the indexes LOOKED like they were rallying, MOST stocks were actually being dumped while a few (AAPL, for expample) were kept aloft to maintain the ILLUSION that the market was still strong. That's how they keep the retail buyers moving in while the institutional investors head for the hills. Yesterday's action was nothing but another low-volume bounce – the kind we teach our Members to ignore:
Short-term, we're certainly oversold but we'll be very critical of a low-volume recovery until we see those 50 dmas retaken on the indexes. Those are way up at 16,877 on the Dow, 1,954 on the S&P, 4,368 on the Nasdaq, 10,912 on the NYSE and 1,160 on the Russell. Anything less than that and there's nothing to be particularly bullish about.
That doesn't stop us, of course, from picking individual short-term longs. On Wednesday, for example, I was on TV on Money Talk and we featured this play on GTAT as my "Options Play of the Month." Last night, GTAT knocked it out of the park on earnings and the stock shot up over 10% to $15+ already in pre-market trading. That will put us well on track to the full $14,000 return on this spread and a 1,650% gain on cash ($13,200 profit on the $800 we invested)! Not bad for a few day's work, right?
By the way, if you never want to miss trade ideas like GTAT again – sign up right here for Membership and you will be among the first to hear about our new trade ideas every day!
by Phil Davis - August 1st, 2014 7:07 am
What fun this is! Well, it's fun for us because we were playing for this drop and not only did our bearish Short-Term Portfolio pop 10% yesterday but our bullish Long-Term Portfolio crossed over the 20% line for the first time this year. How is that possible? Because we are using our "Be the House – Not the Gambler™" strategy to SELL premium to suckers who think they know what the market is going to do!
This allows us to make money in any market direction while remaining well-hedged for the downturns. It also allows us to put up these spectacular gains while using less than 50% of our cash – keeping it on the sidelines and ready to deploy when we catch a good bargain on one of our Buy Lists to add to our virtual portfolios. We had not one but two special Live Trading Webinars yesterday for our Members, where we cashed out the XOM puts I mentioned FOR FREE last Friday for a 300% gain.
If you want to get our morning posts delivered to you each day, in progress, at 8:30 each day with access to the full posts pre-market – just sign up right here.
Last Friday I also suggested our SCO (ultra-short oil) longs and that $1,200 position in our Short-Term Portfolio closed yesterday at $3,400 – up a very nice 183% and the SQQQ trade I aslo put up in last Friday's morning post for a net $400 credit (also featured on TV on this Wednesday's Money Show) finished yesterday's session at $1,060 – up $1,400 (350%) in less than a week!
Another hedge we discussed were the TZA Aug $14 calls which were $1.67 on Wednesday (more FREE picks in the morning post), which was already up 153% from 0.66 when I first mentioned them (outside of our Live Member Chat Room) in our July 8th post. As of yesterday's close, they were $2.51 – up 50% from Wednesday and up 280% overall.
by Phil Davis - July 31st, 2014 8:05 am
I warned you about Argentina!
We discussed them way back in December as they faked their own GDP data, that it was nothing more than window-dressing to keep them from LOOKING like they were in default – even though they were clearly heading that way.
So it should come as no surprise that, as the deadline finally comes, there is no surprising rescue for the World's 26th largest economy ($477Bn vs $499Bn for Norway, $394Bn for Austria, $385Bn for Thailand and $248Bn for Greece). Since it's not a surprise, we took the opportunity this morning to go long in the Futures, as the 1% dip around 4am seemed overdone. I sent out a special Alert to all of our Members, saying:
Still, I like /TF for a bullish over the 1,130 line (testing now) and /YM at 16,700 and /ES 1,950 for bounces but VERY TIGHT STOPS if any of them fail.
Fortunately, they did not fail and already (8am) we have /TF 1,135 (up $500 per contract), /YM 16,732 (up $160 per contract) and /ES 1,955 (up $250 per contract) and our Egg McMuffins are paid for and those trades are now off the table (tight stops at least), as we expect more selling at the open!
It's nice to play the Futures to offset bearish bets, like the SQQQ (ultra-short Nasdaq) trade we discussed in yesterday's morning post and the QQQ weekly $96 puts we added for .22 in yesterday's live Member Chat ahead of the Fed – as we expected the statement would disappoint. Those should come out well this morning and going long on the Futures locks in those potential gains for us.
Now, getting back to Argentina, ARGT is UP 32% this year and that is just silly so ARGT makes a nice short at $23.20 and you can, in fact, buy the Oct $23 puts for $1.45 and, if they give back that 32%, they'll be back to $19 and you'll have $4+ for a $2.55 gain (175%) – that's a fun way to play it.
by Phil Davis - July 25th, 2014 7:55 am
If you read yesterday's post and took action on our trade idea to short Oil Futures (/CL) at the $103 line, then you were able to pocket $1,000 PER CONTRACT in just 3 hours. In the Morning post (delivered to our Members via Email at 8:35 am), the trade idea was:
"We're still shorting Oil (/CL) Futures at that $103 line and we hit it again this morning and, hopefully, we'll get a nice pullback around 10:30 – after the natural gas report shows a nice build."
That's about on par for our Futures trading as we demonstrated LIVE in Tuesday's Live Trading Webinar $300 of Futures profits in less than an hour (replay available here). We'll be doing more Futures Webinars for our Members aside from our usual Tuesday Live Trading Webcasts (sign up for your Membership here so you don't miss our trade ideas).
How to trade the Futures is one of the many things we learn at Philstockworld – another thing is PATIENCE! Patience has kept us from chasing this rally as we once again top out the market. On Tuesday we took a nice, speculative bullish trade (but did not officially add it to our Portfolios) - just in case we do have a breakout – but, otherwise, we've been working on our downside protection.
We are FUNDAMENTAL traders who just so happen to use Options and Futures for leverage and hedging – simply because they are convenient and profitable instruments when used correctly. What we teach is not all that complicated – but it isn't easy either. That's why not many people trade Options and Futures – it requires discipline and takes time and practice to master – not really the kind of thing our education system prepares our students for these days….
YOU, however, should not be intimidated away from making money. Our basic concepts are VERY SIMPLE and the concepts are explained in quick videos like "How To Buy a Stock for a 15-20% Discount" and "The Secret to Consistent 20-40% Annual Returns" – something we are demonstrating this year in the 5 Virtual Portfolios we track for our Members.
by Phil Davis - July 10th, 2014 8:31 am
That's how much money yesterday's Alert to Members made as of this morning as the Russell Futures crossed our goal line at 1,150. The alert went out at 9:52 am and we had all day to enter as the Russell drifted along that line until, finally, we got our big drop this morning.
My call in the morning was:
I still like the /TF play below the 1,170 line – that's got $2,000 written all over it (down to 1,150).
We actually oveshot that mark with the bottom coming at 1,140, which is our -5% line on the Big Chart, which uses our 5% Rule™ to make these amazingly profitable predictions. Those extra 10 points were ANOTHER $1,000 per contract for those who hung on past our goaaaaalllllll!!!
Even if you are a free reader, you got your money's worth – as we gave away, FOR FREE, our TZA Aug $14 calls at .91 on Tuesday's post. Sure it was 50% after our Members got the trade at .66 on July 3rd, but beggers can't be choosers, right? Still, even if you only began following our hedge at .91, those calls are now $1.50 in the money, so up another 50% this morning for a $1,180 profit on the 20 we suggested in just two days!
That's just one of the many ways we teach our Members to make money by hedging at PSW (you can subcribe here) we expected this sell-off (see last two week's worth of posts) and positioned for it with trades like:
- DXD Aug $25/27 bull call spread (6/27 in main post) at net 0.60, now $1.15 – up 91%
- TZA Aug $15s calls (6/27 at 11:26) at .70, selling Jan $12 puts for $1 for net .30 credit, now 0.45 – up .75 (250%)
- 40 SQQQ Aug $40/44 bull call spreads (1/3 at 11:29) at $1.15 ($4,600), now $2.15 – up $4,000 (86%)
- 20 QQQ July $97 puts (1/7 at 9:35) at $1.59 ($3,180), now $3 ($6,000) – up $2,820 (88%)
by Phil Davis - May 30th, 2014 8:21 am
I hurt myself today
To see if I still feel
I focus on the pain
The only thing that's real – Nine Inch Nails
Were we wrong to cash out?
It's hard to feel bad about taking a 19% profit off the table after just 6 months (in our $500,000 Long-Term Portfolio) but we had another low-volume pump-job yesterday that sent some of the positions we closed up sharply and left us regretting our timing – just a little.
Still, the time to sell your positions is when other people are buying, not while everyone is panicking. We got great exit prices and, on the whole, it was fairly stress-free. S&P 1,920 was our predicted top and we pulled the trigger to take the money and run at 1,910 because, as experience has taught us – it doesn't pay to be greedy!
Last week and this week, I laid out my case for why the economy is not as good as it seems and certainly not good enough to be paying all-time highs for stocks. As you can see from the chart on the left – I'm certainly not the only one who thinks so as the "smart money" has flown out of the market this year, taking advantage of each record high to sell, Sell, SELL!!!
We were a little more patient, we moved our Conservative Income Portfolio ($500,000) to cash at the end of March and avoided the April sell-off and have since been buying bargain stocks in that portfolio. We had left our more aggressive Long-Term Portfolio ($500,000) on the table but this last leg of the rally left it up a ridiculous 19% for the year – and that's halfway to our best-case goal so it's a good time to take a break, step back, and see how the market handles early June.
It's not like we can't find anything to do with our cash. In additions to our usual Futures trading, we still have our Short-Term ($100,000), Butterfly ($100,000) and $25,000 Portfolios to play with and, since Wednesday…