Clearly you can't say I didn't tell you so!
Just last Thursday, I titled the morning post "Rally Almost Out of Gas" and the next day we fell and I looked really smart but then we recovered and people said "see, you were wrong" and now we're down 1% in the Futures this morning and I'm right again. The point, however, is not to be right or wrong on any given day but to PROTECT our portfolio with sensible hedges and THAT is what Thursday's post was all about.
We also did a Live Trading Webinar Thursday afternoon, where we discussed our idea to short the S&P (/ES Futures) at the 2,050 level and, as you can see from the chart, that led to a $500 per contract win at 2,040. We also made $225 trading the Futures during the Webinar for our Members and that was our WORST performance for the month of March – when every Webinar was a winner. We spoke extensively about using Futures and hedges to balance our portfolios near the end of the Webinar.
That morning (Thursday), we added 100 SDS Sept $16 calls to our Short-Term Portfolio at $3.10, against which we sold the Sept $22 calls for 0.90, putting us in the $6 spread for net $2.50 with a $35,000 upside potential and we already have a July TZA spread for additional protection so we're essentially just amused by today's little pullback – nothing at all to panic about.
In fact, we still haven't broken down enough to start taking our longs off the table, though we did sell a lot of calls against our existing positions to protect ourselves (and collect some CASH!!! while we wait). CASH!!! is, by far, our favorite position at the moment and all 4 of our virtual tracking portfolios are stuffed with it. In fact, our main Long-Term Portfolio has more cash ($890,000) than value ($878,000) thanks to all the short puts we sold.
I already sent out an extensive market report early this morning so I'm not going to repeat myself analyzing today's move (it was also tweeted). The most important parts are:
What a start, Europe is down