Monday Meltdown – Commodities Collapse Ahead of the Fed

Brent crude is down almost $5 since Thursday morning.

That's over 10% off and getting much worse this morning as people are beginning to lose faith in the Global Economy due to the endless amounts of bad data I kept telling you it was a bad idea to ignore (see my entire last quarter of posts).  Well, I love to say "I told you so", so there it is – now we can move on

You'll notice that, at the bottom of each of those posts on Seeking Alpha, there is a disclosure statement and that statement has said since early August: "currently mainly cash and an otherwise slightly bearish mix of long and short positions."  That about sums it up for us.  In fact, we just did a review of our virtual portfolios for our Members and those are over 80% in cash and actually made a little money (very little) in last week's collapse.  

You'd be making money too if you followed our FREE advice on Dec 2nd and used our Futures hedges or even our SDS hedge, which is very much like the kind we use to protect our Long-Term Portfolio.  Our trade idea at the time was:

  • Sell 20 SDS March $19 puts for $1.25 ($2,500 credit)
  • Buy 20 SDS Jan $18 calls for $1.20 ($2,400 debit)
  • Sell 20 SDS Jan $20 calls for $0.48 ($960 credit)

SDS hasn't even moved up $2 yet but the short puts have fallen to 0.72 ($1,440) while the long calls are $2.72 ($5,440) while the short $20s are $1.37 ($2,740) for net $1,260 out of a potential $4,000 +…
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