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Whiplash Wednesday – Up and Down Markets Make Investors Sick

SPX WEEKLYWow, what a ride!  

I told you yesterday morning we would be looking to test our strong bounce lines intra-day and our targets were:

Dow 17,850, S&P 2,060, Nasdaq 4,905, NYSE 10,910 and Russell 1,245

While the S&P and Russell did manage to hold our lines, once again our 5% Rule™ managed to nail the action despite the wild swings with a total miss of 105 points out of 36,970 index points – off by just 0.28%.  We made a similar prediction last Thursday and missed by 0.17% – so it's not a fluke.  This indicates to us the TradeBots are firmly in command and we'll be able to use that to our advantage to make some aggressive Futures calls in our Live Member Chat Room.  

Yesterday morning we called /RB (Gasoline Futures) long at $1.75 and caught a ride up to $1.77 for an $840 per contract gain.  We have inventories today and, if we get back around $1.75, we'll be liking that trade again for another bounce.  That's right cheapskate readers – it's April 1st and that means it's time for your quarterly free picks!  

At the beginning of each quarter, we like to share a few of our picks with the free readers so they can earn enough money to pay for a Membership.  Last quarter, we reviewed 11 FREE trade ideas from the previous year that made turned $110,000 (ish, at $10,000 per trade) into $221,392 – up 101% in less than 13 months with only one loser out of 11 (9%).  

Our first free trade idea for 2015 was a long play on /NG (natural gas Futures) on Jan 5th at $3 with a target of $3.25-$3.50 and we hit $3.35 on the 14th, which may not sound like much but /NG contracts pay $100 per penny, per contract for a $3,500 per contract gain.  We were also in and out of oil and called the up move on /CL (oil Futures) from $50, which topped out at $54 in Feb for a $4,000 per contract gain.

  • Tuesday, Jan 6th, /NG had dipped to $2.825 and I reiterated our long and called it "our first official trade of the year" and gave a Free Webinar that day to discuss why we loved it long.  Similarly, we like oil long too as it dipped to $48.50.  As I said at the time:

We can tell you this because the oil market is fixed, it's MANIPULATED (not by us) and we know HOW it's manipulated, so we can use our knowledge to our advantage. 

We do these trades EVERY DAY, so we can afford to show off once in a while.  As usual, we stop giving away free trade ideas once earnings season kicks in (1/15) – so enjoy them while you can. 

  • Thursday, Jan 8th, I made a straight call on TZA at $12.50 and we caught a quick ride to $13.50 (8%) which is pretty good for a boring old stock pick. 
  • RIG was our Friday, Jan 9th pick at $16.27 and that one is now loser at $14.67 (down 10%) but, to be fair, RIG did pop over $20 in Feb and that was up 22.9% so shame on you if you didn't take a nice, quich profit off the table!  We also made a series of short calls on the Futures that made many thousands of dollars as the market corrected from S&P 2,060 to 1,988 on the 20th (3.4%). 

Monday, Jan 12th, with only a few free picks left, we ran a list for our cheapskate readers to tide them over until this quarter (unless, of course, they JOINED US HERE):

This is just a scam – a con that is being played on energy investors that is giving us fantastic opportunities to buy companies like BHI ($56.47), RIG ($15.83), XCO ($1.90), TOT ($48.64), etc – as well as actual oil ($47 on /CL), natural gas ($2.825 on /NG) and gasoline ($1.30 on /RB) for some fantastic LONG-TERM gains.  

BHI is now $63.58 (up 12.6%), RIG, as we mentioned was up, now down.  XCO is $1.83 (-3.6%) so still playable, TOT $49.66 (up 2%) still playable and oil is $47.50 (up $500 per contract), /NG is now $2.63 but we got out ages ago and gasoline will make you cry as it's $1.77 at $420 per penny, per contract – so that's up $18,060 per contract and THAT is what we mean by "fantastic long-term gains".  

  • Tuesday, Jan 13th, I was too busy ranting about Greece, Europe and the Global Economy to bother with picks but it's a great read (if I do say so myself). 
  • Wednesday, Jan 14th I reiterated how much I loved our TZA trade.  The spread we had in our Short-Term Portfolio (Members Only) was $13,000 and designed to pay back $30,000 (up 170%) if the Russell finished the month below 1,170 and, as I mentioned above, we finished the month (expirations on 1/16) with the Russell down at 1,151 (but it close higher in wild action), so we got most of our goal.  I put up a short idea on TSLA in the morning post:

TSLA/Lunar – I don't like the option prices so not too keen but, if I were going to short it, I'd take the 5 of the June $220/200 bear put spreads for $12 ($6,000) and sell 2 of the Feb $180 puts for $5 ($1,000) and see how things go.  Most likely, the Febs expire before earnings and, if TLSA is up, you can still get good money selling a few more March puts (the $170 puts are currently $5) so it's net $5K on $10K worth of spreads that are on the money if all goes well through Feb expirations.  

TSLA is all the way down at $188.77 as of yesterday's close and the net of that spread is now $6,945 (up 73% off what became a $4,000 entry with the March put sale).  Certainly well on it's way to the full $6,000 gain (+150%).  See – this is how we give our free readers a chance to pay for their membership with our trade ideas!  

Since it was almost our last day of free trades for the cheapskates, I added another freebie on one of our favorite stocks:

One stock I can tell you free readers about is one that's coming off our buy list after 5 years as it's no longer cheap (but we still love it) and that's TASR, our Stock of the Decade, which we've been buying since it was $5.

As I said though, it's off our Buy List for now as it's ahead of schedule, though we're perfectly happy with the spread we have on them in our Long-Term Portfolio, which is 10 of the 2016 $13/20 bull call spreads at $2,000 against which we sold 10 of the 2016 $13 puts for $2,000 for a net $400 credit.  If TASR manages to hold $20 until next January, we will net back $7,400 against our $400 credit for a gain of 1,850% in 18 months – now you can see why we love them so much!  

We just cashed out that spread for net $4,600, up $5,000 (1,250%) as we cashed out our LTP last Tuesday.  It was on track and doing fine (we din't need a stock to go up when we sell options – just not go down) but we're worried about a correction and we can always get back in.  After all – it's our Stock of the Decade and we still have 5 years left!  

  • Thursday, Jan 15th, was the day the Swiss decoupled from the Euro and all Hell broke loose so no new trade idea in the post (but we did have a great time trading in our Live Member Chat Room).  We did take the money and ran on /NG as it popped to $3.30.  That call I made in the post.   
  • Friday, Jan 16th, we did a bit of a review – which is always good to go over and that was the end of our January trade giveaways.  

As April begins, we find ourselves almost all in cash in our Long-Term Portfolio and aggressively short in our Short-Term Portfolio because we're still expecting a bit of a correction.  TZA can still be used as an effective hedge at $10.11 but you have to take those profits off the table when they come!  In our STP, we have some very aggressive TZA option positions and yesterday, in our Live Webinar, we discussed the need to lighten up when we get a chance.  

I gave you our /RB trade idea (long at $1.75) and we discussed a way you can still play BHI when I was on TV last week so there's a couple of free ideas to get you going in April.  

Also, I like LL to recover and the next time we have free trades will be July, so let's go for the Aug $30/40 bull call spread at $3.40, which will pay $10 if all goes well in just 142 days.  That can turn $340 into $1,000 (+200%) and then you can use that +$660 to buy two months of a Live Chat Membership, where you'll get dozens of other great trade ideas each month.  

Keep in mind we're still looking for an overall market correction (see previous posts) but LL has suffered enough – hopefully. 

 

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