12:35pm (EST)
We knew coming into the week there was a good chance the market could trade lower if the bulls failed at resistance and if they did we would need to protect profits. We have some nice gains going for our Daily as we cashed out the other half of a triple-digit winner (up 147%) and some of our put options plays are getting a bounce. We also have a few positions that were up double-digits in our Weekly Wrap and we also set Hard Stops in our portfolio to lock-in gains if they were triggered.
While we believe these stocks in our Weekly are still long-term “buys”, we may be able to get back into these positions at lower prices. We could sell deep-in-the-money calls but we would rather do so at lower levels as we build up our cash reserves to play a possible volatile September.
The one good thing about pullback and corrections is that good stocks become cheaper and we can take advantage of shorting bad ones that are overpriced. We can use put options to play a continued downtrend so don’t fear playing the market when there is a slide because you can make just as much money shorting stocks and buying put options as you can when the market is going up.
With that said, we must also remember this week’s moves are going to be on low volume and we spent a ton of time covering the Fibonacci levels this weekend. If you haven’t studied the charts and read our commentary, do so today. We hope we made the technical jargon easier to understand and it’s important to know what the downside targets are and where resistance lies. The other important factor to remember is that the indexes are still in a trading range and we have given specific targets to watch for as far as a breakdown or breakout.
The Dow is currently down 113 points to 14,832 while the S&P 500 is off by 18 points to 1,638. The Nasdaq is lower by 56 points to 3,601 and the Russell 2000 is declining 15 points to 1,023. The S&P 500 Volatility Index ($VIX, 16.42, up 1.43) is up nearly 10% and back over 15. Watch the 17.50 level.
Again, the targets we have been covering have been pinpoint accurate and will help sooth your worries on where the market is headed until support cracks or resistance is cleared.
Side Note: Gold is surging to $1,425 after clearing the $1,400 level and the surge has been amazing. Silver is also on a roll and is north of $24.
We have been fortunate enough to close 12-out-of-13 winning trades since mid-July and our remaining positions could see continued action this week so we will be busy. Again, we will be entering September in perfect shape and we will be well rested for the battles ahead.
Subscribers, hit the Members Area for the Profit Alerts for our Daily and the Weekly Wrap Premium section for action to take on our Weekly Wrap trades.
