$5,000 Friday – How to Profit from Market Corrections
by phil - 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.
Even a straight purchase of TZA (also noted in Tuesday's post – why…
TGIF – Slip and Slide Week Comes to a Close
by phil - July 11th, 2014 8:31 am
Wow, that was a close one!
We ALMOST had a correction but, fortunately, dip buyers prevailed and we pulled a sharp reversal right after the bell yesterday and finished the day only down about 0.4% and about 2.5% down for the week (so far).
I do hate to be nit-picky about these things but – can we REALLY call it a reversal when, in fact, declining volume on the NYSE was 2,275,176,430 while advancing was only 834,544?
That's 3:1 declining! In fact, of the 3,241 shares on the NYSE, only 964 were positive yesterday – also 3:1 against. The same on the broader Nasdaq too.
In fact, yesterday was a complete catastrophe other than the low-volume "rally" from 10am to 2pm, with the other 75% of the day's volume being all downhill from 9:30 to 10:00 and again from 2pm to close (4pm EST).
Still, as the great President Bush once said: "fool me once, shame on — shame on you. Fool me — you can't get fooled again."
Of course, an even greater President, Lincoln (who had himself shot when he found out he was a Republican) actually said that you can, indeed fool some of the people all of the time and the stock market is certainly evidence of that, as dip buyers rush in on anything that even looks like it might be a rally – no matter how much of a charade it actually is.
You can see our predicted 1,150 line come into play on Dave Fry's Russell Chart but it doesn't show that the Russell Futures made it all the way down to 1,140 before being jammed back to 1,165 and, finally, settling the day at 1,160.
As Dave points out, we're still down 4% for the weak week and all yesterday's action really was was a WEAK bounce off a 5% dip (1,200 to 1,140), which is EXACTLY what our 5% Rule™ predicted would happen.
Those TZA August $14 calls I told you about on Tuesday, when they were .91, topped…