Business Magazine

Which Way Wednesday – 2,100 and Bust?

Posted on the 18 February 2015 by Phil's Stock World @philstockworld

SPY  5  MINUTEYay, S&P 2,100!  Now what?

As we predicted yesterday morning, nothing was going to stop the S&P from banging up to that 2,100 line.  Not for lack of trying, either as we had a 22% decline in the Empire State Manufacturing Index and a 2% decline in the Housing Market Index but none of that matters because Greece is going to be fixed again so the markets flew higher – albeit only at the last minute on no volume.  Still – it's a pretty picture, isn't it?

We demonstrated the idiocy of the markets yesterday for our Members in our Live Webinar by scaling into a short position on March Oil Futures (/CLH5), which ran up while we were doing a demonstration on scaling in.  We decided to stay short overnight and, this morning, we were rewarded with a $4,000 gain.  Now we've flipped to the April Futures (/CLJ5) in our Live Member Chat Room, which we're shorting at $53.50 in anticipation of another nice dip today.  

Of course we told you, right in yesterday's morning post (which you can have delivered to you pre-market daily by clicking here) that we were shorting oil at $53.50 and they fell all the way to $51 at 10 am, for a lovely $2,500 per contract gain.  By all means though – SAVE your money and DON'T subscribe to the newsletter – I'm sure everyone you read gives you trade ideas that make $2,500 per contract in 95 minutes, so there's no need to read our little ideas.  

Which Way Wednesday – 2,100 and Bust?Of course, $2,500 per contract is nothing compared to Premium Articles, like our "Secret Santa's Inflation Hedges for 2015," which had 4 great trade ideas, two of which are still playable but XHB (Home Builder ETF) isn't, as the 20 2016 $28 puts we sold for $2.25 ($4,500) on 12/21 are already down to 0.70 ($1,400), for a very nice 68.8% gain in just 2 months ($3,100) good thing you didn't waste money on a subscription in December, right?  

We were more aggressive than that though, as we suggested pairing it with 20 of the 2016 $28/33 bull call spreads at $3.30 ($6,600) for a net $2,100 outlay on the spread.  As you can see from the chart, XHB is up almost 20% since our call (not bad if you were just playing the stock) and, as of yesterday's close, the 2016 $28 calls were $8.90 and the $33 calls were $4.60 for net $4.30 x 20 contracts ($8,600) less the $1,400 we still owe on the short puts is $7,600, which is up a total of $5,500 (261%) in 2 months – 10x leverage to the move the stock made!  

Which Way Wednesday – 2,100 and Bust?Our other hedge from that report that already took off was XLE (Energy Sector ETF), where our play was buying 2 2016 $75/80 bull call spreads at $2.20 ($440), offset by selling 2 2017 $50 puts for $2 ($400) for net $40.  The purpose of this play was to lock in the low price of oil and gas for gains of up to $990 per set to offset gains for each home or car you wanted to protect.  XLE is "only" up 10% so far but the spread is already netting $518 – up 1,195% on the 10% move in XLE – that will pay for a few tanks of gas!  

Which Way Wednesday – 2,100 and Bust?We even had a trade (yep, this is all just one Member article) that was guaranteed to make 100% using the ABX (Barrick Gold) 2016 $10/15 bull call spread at $1.60 and selling the 2016 $8 puts for 0.70 for net 0.90 on the $5 spread.  The trade was for 30 contracts at $2,700 and the goal was to pay for a Basic Membership, which was on sale at the time.  It's only February but the $10/15 spread is already $1.99 and the short puts are 0.76 for net $1.23 ($3,690) – that's "only" up $990 (36.6%) so you can still play it but, unfortunately, you missed the guarantee, because it was already up 100% in January and has since pulled back a bit. 

That's OK, we'll find some other trades for you in our Member Chat Room or through our Top Trade Alerts, which have already become very popular as a new product this year.  Or, you can keep reading these posts though our tradional free trade period is over until next earnings season, so mostly you'll just hear about the trades you missed in the morning posts.

Which Way Wednesday – 2,100 and Bust?Also, in case you're wondering, we already sent out a news report with today's strategies out to our Members at 5:33 this morning – so no need to reshash that in the morning post, right?  Aside from hopefully convincing a few of our cheapskate readers (and there are tens of thousands of you every day!) to become paying members – we're also reinforcing this year's theme of Getting Rich Slowly.

If you don't understand how making 68.8%, 261% and 36.6% in two months relates to "getting rich slowly" – then you REALLY need to subscribe!  

 


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!

Back to Featured Articles on Logo Paperblog

Magazines