Wow, what a week!
With these wild swings, there's money to be made on the long and the short side of the market. This morning, I called for shorting Nasdaq Futures (/NQ) at 6,850 and we just cashed out our Gasoline (/RB) shorts with a nice profit and now we're shorting Oil (/CL) from $63.60, for reasons I will get to shortly (get it? "shortly"!). Hey, it's Friday, cut me some slack…
We caught nice dips yesterday with our Morning Report's call to short the indexes saying:
Up and up the markets go but we see shorting opportunities this morning IF we cross back below Dow (/YM) 26,100, S&P (/ES) 2,800, Nasdaq (/NQ) 6,810 and Russell (/TF) 1,585. The rule of thumb for shorting the futures is wait for 2 to cross below and then pick the next one that crosses and keep very tight stops back above the line and if ANY of the indexes go back above their line – kill the trade and wait for the next set-up.
As you can see, any of the indexes made nice gains – and that's PER CONTRACT on the Futures. It's not as easy to make the call on a Friday morning but, as I noted, we did short the Nasdaq and we'll be adding a Nasdaq hedge to our Short-Term Portfolio to help lock in some of the gains we've made in the Long-Term Portfolio. Our primary hedge in the Options Opportunity Portfolio is the Russell, using an Ultra-Short (TZA) spread to lock in those gains.
Getting back to Gasoline (/RB), hopefully we won't regret taking a quick $5,000 gain off the table this morning at $1.865 (we still have 2 short at $1.87) but, as I often say to our Members, if you can't be satisfied making $5,000 daily gains ($1M/yr pace) – then maybe you need to play roulette instead of trading stocks.
These are not, by the way, portfolio trades. Our portfolios are managed to generate steady, sensible, reliable, long-term returns. Futures trading is what we do for fun with a very tiny portion of our CASH!!! while we wait for our long-term positions to mature. Unfortunately, since they move all the time and are short-term trades – we tend to talk about…