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Raining Money: How to Trade the Markets Now

Aug 24, 2015

It’s sad, really… 

It’s sad that so many bulls got sucked into so many rallies, only to watch the inevitable crap storm take their money.

They’ll never make it back.

That money is gone, lost, shredded…

But not if you paid attention to the warning signs we made sure you were aware of.

We just broke major support levels… and the next stop may not show up until 14,750. There is simply nothing to get excited about. Unless, of course, you were short oil, as we still are. And you were short the market, which we are with the DXD and SDS trades…

  • DXD was bought around $20.75. It now trades at $25.61.
  • SDS was bought around $19.90. It now trades at $24.54.
  • Power Shares DB Crude Oil Double Short ETN (DTO) at $97. It last traded at $130.
  • Power Shares DB Crude Oil Short ETF (SZO) at $71.55. It last traded at $83.
  • Pro Shares Short Oil & Gas (DDG) at $29.50… It last traded at $33.
  • Pro Shares Ultra Short DJ-UBS Crude Oil (SCO) at $92… It last traded at $135

Just what’s next for the market that’s fallen 2,000 points in no time?

We’re likely to see a quick dead cat bounce off the lows sometime this week. We can profit from that using a VXX put option, such as the VXX October 24 put at market.

Everything is now incredibly oversold…

But be careful to take any gains off the table fast. Once the dead cat has bounced, we fall to 14,750… and perhaps to October 2012 lows.

 

Gilead Sciences (GILD) Returns 169%

Aug 21, 2015

As I write this, the Dow is down 455.

We’re headed to 16,000.

It’s dragging everything down significantly, including GILD where we held an August 120 put with an entry price of $5.20. We bought in June 19, 2015.

Today, it’s up to $14. Sell to close.

It’s now oversold. Look to go long shortly.

 

Easy Gains: Bad News Bear Trades Pay Off…

Aug 20, 2015

As I noted August 3, 2015:

Market participants have every right to fear downside here. If the Dow fails to hold 17,400 support, we could slip as low as 17,000 --- January 2015 support.  

Will the bulls attempt to run the market up again? Sure…

Will they lose money doing so again? You bet.

Oil prices, geopolitical issues, the Fed losing control of just about everything, China, you name it… And it’s wreaking havoc.

Until something miraculous happens, we’re headed lower. I’m still a buyer of the DXD and SDS, which we’ve recommended here on July 15.

It wasn’t rocket science. It took nothing more than common sense to know our economy just isn’t as strong as the government and media want us to believe.

Since August 3, the DXD trade ran from low of about $20.75 to $22.47. The SDS trade ran from $19.90 to $21.36. While the gains aren’t huge, you should see the losses on the other side of the trade.

I’ve pounded the table for months about likely downside.

In fact, on May 28, we recommended picking up the Pro Shares Short FTSE China 50 (YXI) as it traded at $23.50. It’s now up to $29.15…

These are just common sense traded based on crisis and opportunity and technical pivots. That’s it…

 

How We’re Aggressively Trading Oil’s Dead Cat Bounce

Aug 18, 2015

Yesterday, we recommended exiting half of the short oil trades we’ve been touting for days. We then argued for a likely bounce off triple bottom support and massively oversold reads, recommending a buy on he Pro Shares Ultra DJ-UBS Crude Oil (UCO) trade.

While oil hasn’t finished falling, we are getting a slight bounce in the UCO as expected. All we’re looking to do here is trade a very quick dead cat bounce, take our money, and build on our exiting oil short positions.

I’ve done this trade so many times my head spins from it. It’s unbelievably easy because of the herd mentality behavior that I’ve long profited from.

 

 

 

How We Traded the Oil “Rebound” and Won Big

Aug 17, 2015

No one learns…

Despite some rebounding action in the price of oil, there’s no floor in sight. I’ve seen too many traders get sucked into rebounding hopes until to watch hard-earned cash go up in smoke.

And it doesn’t matter what OPEC thinks any more.

The self-serving group has attempted to call the bottom several times this year alone only to lose. With oversupply issues still a problem, the price of oil could easily dip well under $40 to $30 a share.

Its just part of the reason we bought the following on August 4, 2015.

Power Shares DB Crude Oil Double Short ETN (DTO) at $97. It last traded at $113.

Power Shares DB Crude Oil Short ETF (SZO) at $71.55. It last traded at $77.20.

Pro Shares Short Oil & Gas (DDG) at $29.50… It’s down slightly at $28.68.

Pro Shares Ultra Short DJ-UBS Crude Oil (SCO) at $92… It last traded at $109.

Consider selling half of all profitable trades for quick gains. Hold the second halves. If oil can hold triple bottom support at current levels, we may see a quick bounce before the downtrend continues.

To profit from that potential bounce, we can take a position in a trade such as the Pro Shares Ultra DJ-UBS Crude Oil (UCO) up to $22.50.  Consider taking a small position.

 

 

 

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