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Testy Tuesday – 1,920 Or Bust!

Posted on the 03 June 2014 by Phil's Stock World @philstockworld

SPX WEEKLYThat's 2 closes over 1,920.  

It's almost enough to make us regret cashing out our Long-Term Portfolio last week.  We didn't expect to call a perfect top, when you have a large portfolio it can take days to unwind your positions and, despite the very low volume – we'd like to thank all the retail bagholders who bought our shares at top dollar in the last few days.  

Thanks Dave and Bill and Jack and Joe and – well, that's about it as volume is so low, there can't be more then 3 or 4 guys trading in this market!  

Last June started off with low volume too – as well as record highs – and then we dropped 5% into July.  We're simply taking our 119% cash and waiting for the dip – is that so bad?  

SPY 5 MINUTEYesterday was only the 3rd lowest volume day of the year and the action was wonderfully fake around a PMI report that was released, revised and then revised again – all in the same morning!  

In the end, they decided on 56.4, which was in-line with consensus but not before giving us a glimpse on how quickly this market can fail on bad news.  

In our Live Member Chat Room, we took full advantage of the over-reaction on the bad news to go against the panicking sheeple and buy TNA (3x bullish ETF on the Russell) in a 9:57 Alert I sent out to our Members.

That trade was so obvious I tweeted it out as well (you can follow me here) saying:

Testy Tuesday – 1,920 or Bust!Those calls came in cheaper (because our timing was perfect) at $1.50-$1.40 and they topped out at $1.70 and finished the day at $1.61 but should be cheap again this morning, which is why I'm mentioning them now as they make an excellent upside hedge – in case the market does better than we think.  

Since we sidelined $598,000 last week ($98,000 in profits in less than 6 months), we decided to spend $3,000 on 20 of the above contracts – that way we won't cry if the market flies back up on us.

If the market goes lower, like we think it will, we won't cry either as we will get to take our CASH!!! and go shopping!

Meanwhile, since we have a $3,000 upside bet on the Russell it was an easy call this morning to short the Russell Futures at 1,125 and already (8:10) we have a dip to 1,120 for a quick $500 per contract win this morning.  In addition to topping off our Buy List in today's live Webinar (1pm EST – sign in here), we'll probably have some time for a Futures Trading Workshop.  

Testy Tuesday – 1,920 or Bust!A single contract in a single day (out of 45 days remaining on the contract) allows us to make 16% of the contract cost back and the Futures play is, of course, PROTECTED by the long contracts – just in case we were wrong.  

We weren't, fortunately, and we also weren't wrong on our other calls this morning which were (all shorts):

  • Dow (/YM) at 16,700, now 16,675 - up $125 per contract
  • S&P (/ES) at 1,920, now 1,916 - up $200 per contract
  • Nasdaq (/NQ) at 3,725, now 3,715 - up $200 per contract

Futures are a wonderful tool, which is why we have our workshops at least once a month.  We trade futures a lot more often than that (see our recent trade reviews) and it's something every serious trader should consider putting the effort into learning – as it's a skill that can get you out of a lot of market scrapes, when you are lined up on the wrong end of a trade after hourse – as well as providing a fun platform to grab a litlle extra cash before, during or after regular market hours.  

Testy Tuesday – 1,920 or Bust!At the moment, the markets are sustaining themselves on Draghi fever, with the ECB making a rate decision on Thursday morning that traders are "sure" will be a move to more easing.  Since it's already baked in, we prefer to short it for the disappointment but, as I said, we cashed out or main portfolio – so we're not taking things too seriously in either direction this week.  

Yesterday we discussed the currently hidden inflation that is building up inside our poorly-measured economy and, ironically, the ECB is moving to BOOST inflation in the Euro-zone, as it's been coming in at an anemic 0.5%.  DEflation is worse then INflation to Banksters and top 0.01%'ers, who own a lot of stuff and want it to maintain it's value since they levered their cash 10:1 to buy it.  

With the Central Banksters looking to sustain inflation at all costs, why are gold ($1,245) and silver ($18.80) so out of favor?  Well, one major reason is Goldman Sachs and their Bankster buddies have been bashing gold for most of the year.  You might say "well, that's their opinion" but why then is GS, AT THE SAME TIME, making deals with countries like Ecuador, who are giving GS 466,000 ounces ($580M) in a 3-year commitment?

Drive the price of gold to rock-bottom and then make deals to get control of all the gold before driving the prices back up – now where have I heard that plan before?  

IN PROGRESS

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This entry was posted on Tuesday, June 3rd, 2014 at 8:25 am and is filed under Immediately available to public, Uncategorized. You can leave a response, or trackback from your own site.

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