27.7 C
New York
Thursday, August 18, 2022

Subscribe

$1,500 Friday – Yesterday’s Futures Play Pays Big!

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?  

SPY 5 MINUTEFutures 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, 8/25Of course the SQQQ is a bet against AAPL to some extent but, longer-term, there is some advantage to going short TQQQ (because of the decay) and I like the Jan $87.50/75 bear put spread at $4.75 in the $12.50 spread as TQQQ is up at $88.27 and decay alone will put you a buck or two in the money if the Nas flatlines at 4,550. 
  • Member Chat, 8/25I mentioned TQQQ above and for SQQQ I'd go for the Oct $35/39 bull call spread at $1.20 with SQQQ at $35.87 so you are mostly in the money with $2.80 upside (233%) if SQQQ goes up 9%, which would be a 3% drop in the Nas.  
  • Morning Post, 8/28In the STP, we're short the Dow with DXD ($24.40) and short the Nasdaq with SQQQ ($35.70) and short GMCR ($134.73) and WYNN ($196) and XRT ($89.47) and FAS ($106.71) and BIDU ($215) and TSLA ($263) with a few long hedges on stocks we really like to the long side.  In short (get it?), we're very short and positioned for a correction at this point.  
  • Member Chat, 8/29:  With RUT 1,170, I lean back to good old TZA.  Oct $14s are a super-reasonable $1.20 and you can sell $17s for .45 and that's .75 for the $3 spread that's .40 in the money, so great upside coverage to $3, which is up 300% on a $2.50 move in TZA which is less than 20% so a 6% RUT drop will make you 300%.  So, if you are going to lose $30,000 on a 6% drop, you can cover $15,000 with 50 of the spreads ($3,750) and leave it at that or sell an offset that you REALLY want to own if it gets cheaper, like our trades above.
  • Morning Alert, 9/2:  If, however, you buy just $2,500 worth of the of the TZA Oct $13/16 bull call spread at $1 (25 contracts), they will pay you back $7,500 if TZA goes up about 15% (just a 5% move up in the RUT) AND they don't lose all their money until TZA is down 10% (a 3% move up in the RUT) whereas a 3% move up in the RUT against your $15,000 worth of contracts would cost you $1,500 on $15,000 worth of TZA and a 5% move up in the RUT would cost you 15% or $2,200. 

It's too early to say that they are working but, as you can see from the notes, spreads like these can make excellent hedges to a bullish portfolio.  Acutally, that's not true – they are already working because, by having them, we don't have to panic out of our long position just because the market has a small dip.  In fact, we have a Buy List (Members Only) ready to trigger – using profits we might make on our short positions.   

We commit a relatively small amount of capital to some leveraged positions that give us big pay-offs on small drops in our indexes.  In our own Short-Term Portfolio, we are using DXD, GMCR, XLE, XRT, SQQQ, BIDU, FAS and TSLA as short postions to protect the profits we've made in our Long-Term Portfolio.  

Having BALANCE in our portfolios is what allows us to effectively make on-the-fly adjustments using our Futures trading.  $500 here and $1,000 there can really take the sting out of a market move that goes against you!  That's why we concentrate on teaching balanced portfolio strategies to our Members – they let us ride out these little corrections in style…

We're not expecting a big correction, maybe 5% or 10% at most – but we sure are ready for it, just in case.

Have a great weekend,

– Phil

234 COMMENTS

Subscribe
Notify of
234 Comments
Inline Feedbacks
View all comments

Pharmboy

Hi I like to have your view on TEVA as a long term BCS  Jan16 40/50 partially paid by the sale of a Jan16 45 or 42.5 put TIA

To all

Helen found out that a few left contact info at the fund site. My email got hacked again so last nigh I hope I cleared it and sent messages to the contacts. Please except my apology for not responding, we didn't know. I am fairly certain my email has been hacked more than all of PSW together and that is why I believe I am on a watch list. I am just too old to  accept our rights going away. Thanks to everyone!

~~Should one of the world’s richest men get to dictate the future of how we learn about our past?Phil~~Should one of the world’s richest men get to dictate the future of how we learn about our past?

NO NO NO NEVER! Especially that particular guy. Successful in business is an understatement but as I have posted in the past, I met him, and thought he was so strange I turned down a offer arranged by another analyst, that lived in Seattle that quit Raytheon to join Microsoft. Never saw either ever again.

He made his fortune in America and if wasn't so strange a guy would put more to work here instead of getting other supper rich people to follow his lead of doing little for America. 

Some Transportation and Energy trends for your consideration for investment planning. 

According to US EIA (DOE) projections, nat. gas will generate 35% of all electricity by 2040, more than double the share in 2000.  Coal-fired plants are rapidly being replaced/retrofitted for nat. gas.  This trend will reduce coal mining, coal transportation resulting additional reductions in emissions throughout the supply chain.  Nat. gas use is expanding in fleet service (buses, freight trucks, GE locomotives, ships,etc.)  If the cost benefit of nat. gas vs. oil remains in place for a few more years nat.gas infrastructure will be well established. 

The southern leg of the Keystone Pipeline now carries 700,000 bopd from Cushing, OK to Nederland, TX to supply the Gulf Coast refineries.  If (when) approved the northern leg will deliver synthetic crude made from kerogen extracted from the Canadian tar sands of Alberta to the Gulf Coast for refining and export. 

EIA estimates that US refineries received more than 1MM bopd by rail, truck and barge in 2012, a 57% increase over 2011.  Rail experienced the greatest increase.  In 2008 US Class I railroads originated 9,5000 carloads of crude oil; by 2012 they were moving 234,000 carloads and 2013 is expected to have exceeded 400,000 carloads.  In addition to crude the railroads are very busy with frack sands (proppants) as I have mentioned in the past.  In 2012 ~200,000 carloads were shipped by rail.

Energy companies are looking to increase the capacity to export nat. gas as LNG.  Six LNG ports have permits for up to 9.3 billion cubic feet of LNG per day.  20 more applications are pending.  EIA estimates that more than 2 Trillion cubic feet of LNG will be exported per day (!) by 2020. 

Domestic production of steel, chemicals, glass, plastics, and fertilizer stand to benefit the most if nat. gas remains relatively inexpensive.  Note however, that other raw materials may have a bigger influence on the cost of production and inflation in these could easily offset the benefit of lower energy costs.

So there is my 2 cents for your consideration.

Source:  Transportation Research Board of the National Academies

PS:  Fracking is beginning to take off in China now and at first blush they may have more shale/tight gas than the US  so the impact may be even more significant for their economy over the next 10-20 years..

StJ:  Hollande/LaPen – Whither France?  Europe?  Is this just a local spat, or is the Eurozone moving Right? If so, what would "Right" imply for the EU?  I've been watching the Catalan / Arturo Mas attempt at secession, but I am at a loss in trying to generalize the political effect[s] of the protracted European  recession.  Would it be an impractical fantasy to think that one or more Eurozone countries could revert to a national currency and stiff Euro bondholders?  

Great FT article on forecasting.  Keynes & Phil share[d] a viewpoint, it seems:

 

 "The secret to Keynes’s eventual profits is that he changed his approach. He abandoned macroeconomic forecasting entirely. Instead, he sought out well-managed companies with strong dividend yields, and held on to them for the long term. This approach is now associated with Warren Buffett, who quotes Keynes’s investment maxims with approval. But the key insight is that the strategy does not require macroeconomic predictions. Keynes, the most influential macroeconomist in history, realised not only that such forecasts were beyond his skill but that they were unnecessary."

 

 

September 5, 2014 12:09 pm

How to see into the future

http://www.ft.com/intl/cms/s/2/3950604a-33bc-11e4-ba62-00144feabdc0.html#axzz3CZQvJIjX

"At the end of 1984, a member of Big Brother’s regime, in the midst of carrying out torture, makes a certain admission: “power is not a means, it is an end.” Whatever is in Putin’s mind, whatever he says and does, all he is really defending is his own power…"

Read more: http://www.politico.com/magazine/story/2014/09/to-understand-putin-read-orwell-110551_Page2.html#ixzz3CaKBt6oM

And lastly, careful on short oil positions.  The 11 missing airliners, according to Stratfor's Fred Burton, will not get anywhere near the U.S. but one could be used to plow into a Middle Eastern oilfield as part of an attack.

Getting paid 21$ an hour and selling a hamburger for .56 cents please do the math on this BS

Yodi – please review that sentence again. The claim is their hamburgers only cost an incremental $0.56 more than US hamburgers. A very big difference than your interpretation (and mine on the first reading). Can the higher wage structure only add $0.56 to a burger? It is possible, but we would need to know about their fixed and variable costs and the quantity of products sold on some basis of time… Eric

Eric OK thanks I follow but still checked with some young friends here in Germany Basic Hamburger 1€

so 1.30 US wages 5 to 6 € say top 8$ Normally dif between brutto and netto 1/3 so if they take home even 4 € it is a lot. Fixed employees can get up to 15€ less 1/3 so 10 to 11€ or say 14.50 $ roughly in USD. 

I do not think the conditions in Denmark are better than here so still a lot of BS

Yodi

http://en.m.wikipedia.org/wiki/List_of_minimum_wages_by_country#Countries

No minimum wage in Denmark, but the average minimum wage was about $20 USD in 2013. So Louise seems to be telling the truth.

Phil- what is your policy on dividend reinvesting? I don't see you mention it, so I am curious if you are against doing that? I usually do and for instance on CIM if you bought 1000 shares in May the dividend in July would have been $90 and could have been reinvested for 28 additional shares @$3.21 at the time it was paid. Repeat every quarter and pretty soon you have built a bigger position bringing in 11% on the additional shares each quarter. So why not do that?  

Pay in America is a disgrace, no argument necessary. Watching football today I am totally sold on the new rules not only make the game safer but also more fair and that is based on 2 not finished games. There are more before Sunday night is over but I just don't expect to change my mind. Do all to promote free TV, the picture is so much better than any pay service!

Other football fun, Red's Apple Ale, is that the first commercial bart? Barley malt and cider. The other missed part was ???  shot "unfiltered", my secrets being commercialized. Of course if you love bud or coors we disagree.

akademia 

Hourly wages and I believe in Father Christmas 20$

yodi

You must admit $7.35 is not a living wage, that is more or less half of my disability after all consideration, medical and tax. $21  is a stretch but might be true, wages are being repressed in Germany also.

Wages have to be in relation to the product you sell. Say the hamburger sells for 1.30$ at 21$/hour you need to sell 16 hamburgers to cover one worker not taken any other cost of the product in to consideration possible you need 3 people to sell one hamburger that is nearly 50 hamburgers / hour nearly 1 minute per hamburger, just not possible. Even if the building and the cost of the hamburger was for free.

Burgers sell for close to $5 where wage is $7.35 but yes yodi $21 is hard to believe, find a MCD and check German price, regular no promotional.

Sorry shadowfax I do not eat these hamburgers check what they put in them and you will not eat them any more!!!! Obviously Phil's 25$ hamburger is something else.

Bed time for me meet you all tomorrow.

but we already have such thing as BigMac Index?

http://www.economist.com/content/big-mac-index

yodi

I don't eat them either but realize I asked for you to check a euro price and don't eat them, beer is more healthy!

I picked up Henry Kissinger's book On China [catchy title] out of a sense of obligation, not being the kind of overly-seriously political tract I normally care to read.  I am 76 pages into it, and have learned more about China in a few hours than I have learned from all the FT/Economist/NYT-whatever news reports I have read over decades.  Hard to believe that a book like this would be a real page-turner, but I highly recommend it for anyone with even a glancing interest in the past, and future, of geopolitics.   Fascinating. 

1 3 4 5

Stay Connected

160,887FansLike
408,804FollowersFollow
2,120SubscribersSubscribe

Latest Articles

234
0
Would love your thoughts, please comment.x
()
x