Off to the Moon Again, or a Bear Trap?
By: Steve Smith
And off we go to the moon again, maybe. As I write this the Dow is up over 500 points, the S&P is up 1.69%, and the NASDAQ is up a point and a half.
We shall see if this keeps going or if it’s just a bear trap.
I’m not prepared to make a prediction at this point, I will just say that this kind of volatility is precisely why I never leave my Options360 subscribers in a naked position.
You’re probably getting tired of me reminding you of Keynes’ quote, but I am going to anyway because it is that important…
“The market can stay irrational longer than you can stay liquid!”
With the election coming up, the social turmoil, the possible resurgence of COVID in Europe, and the Fed printing money and holding rates at zero…
We can expect to see even more volatility.
That’s a great thing because, as traders, we make money from volatility. We just don’t want to be naked in any position.
Risk management is as important as the position you enter in this environment.
That risk management is why the Options360 model portfolio is up 32% YTD, against the S&P which is up just 1.96% for the year.
Late last month it became clear that we were going to see a much-needed downturn in the market, so I put on a few bearing trades in Options360 early in September. We exited 2 of those positions already for substantial profits:
- 55% gain in Best Buy, and
- 62% gain in QQQ
We still have 6 positions on in the model portfolio and I am always on the lookout for more good trades.
I expect to find some exciting opportunities over the next few months no matter where the market goes from here.
We make money trading when the market is going up. But, we make MORE money when the market is falling.
You can get access to all of my trades for just $19.
To Your Success,
P.S. Get all the details of the $19 trial membership here.
The next few months could be the most profitable of the year. Don’t miss out! Click here and try Options360 for just $19.
Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.
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