Well, it looks like we dodged a bullet.
More like $50Bn worth of Hurricane Irma damage vs up to $200Bn expected, so a nice break for insurance stocks (KIE) – as long as there are no other storms barreling down on us. The markets have gapped up half a point and we're back to our usual Mon/Tues shorting levels at Dow (/YM) 21,900, S&P (/ES) 2,475, Nasdaq (/NQ) 5,970 and Russell (/TF) 1,410. We had many, many thousands of Dollars of winning plays from those levels on the short side over the past few weeks (see recent posts), so no reason to change our minds now.
Speaking of recent posts, 2 Mondays ago (8/28) our PSW Report was titled "Monday Market Musings – Making Money on Misery" we taled about several hurricane plays and it's important, as an investor, that you learn to turn macro events to your advantage – or you will always be at their mercy.
- VLO 2019 $60 calls at $10.35 are now $13 – up 25%
- Oil (/CL) Futures long at $47.35 topped out at $49.45 – up $2,100 per contract
- Lowes (LOW) Oct $75 calls at $1.70 are now $4.80 (our target was $4.50) – up $310 per contract (182%)
I know it comes across as bragging when we review our trades but it's important to LEARN what worked and what didn't so that, next time a similar situation presents itself, we can make those good trades as a reflex. The premise was simple, the Hurricane would disrupt oil and gasoline production and repairs (and preparations) from the hurricane would benefit Lowes and Home Depot – not complicated, right? The only trick is using that knowledge to make the right bet – and that's exactly what we are trying to teach you to do!
July 31st was a Monday and our Report was titled: "Monday Market Maintenance – Dressing the Windows for One More Day" in which I said: "It's going to be a meaningless Monday, we're just going to sit back and see how the month ends up but we'll certainly short the S&P again if we're back to 2,480 – along…