That's where we finally stopped out on our Nikkei (/NKD) shorts from Friday's morning post. The short at 16,830 made $2,150 PER CONTRACT for those of you smart enough to subscribe to the PSW Report or one of our higher-level memberships. We initiated that trade on Wednesday, during our weekly Live Trading Webinar (replay available here) where we first laid out our logic as to why the Nikkei would plunge over the weekend no matter what the Doha outcome was. As I said in Friday's post (and on Benzinga's Morning Show):
That's right, yesterday we told you that the Nikkei was facing the Kobayashi Maru and we picked a short on the Futures (/NKD) at 16,830 and m-m-m-my Kuroda literally went to war with us, calling the Yen's recent strength "excessive" and warning speculators(us) not to get on the wrong side (our side) of his trade.
…If we're right about the Nikkei dropping 700 points (4%) that would drop EWJ ($11.89) to $11.41 so 0.59 on the puts and let's say we look for 0.50 and a 0.15 (42%) profit by Tuesday – that's almost as much fun as playing the Futures!
We shorted oil futures (/CL) at the bell yesterday as it tested $42 based on the ridiculous amount of fake, Fake, FAKE!!! open front-month orders at the NYMEX and the FACT that the storage facilities at Cushing, OK (where the NYMEX oil is delivered), as well as everywhere else in the country are full, Full, FULL!!! It's a simple investing premise and one we make money on on a regular basis at PSW – simply because we pay attention to basic fundamentals like these.
Yes, there's a big OPEC meeting this Sunday (again, see yesterday's post) but they are talking about a production FREEZE, not cuts and a freeze won't do anything to burn of the massive global glut of oil that is sloshing around out there and oil had already run up from $32.50 to $42 (29%) in anticipation of this and we considered 30% a bridge too