Here we go again!
We've been waiting to see our strong bounce lines broken and they were shattered yesteday so, as promised, it's time once again to make a few bullish bets – just in case we do take out those pesky highs. And, even if we don't – we can still make a few bucks, right?
We were in a similar position on April 14th, when I wrote "5 Trade Ideas That Can Make 500% in an Up Market" and those trades were:
- DBA Jan $23/26 bull call spread at $2, selling $2015 $25 puts for $1.55 for net .45, now $1.40 – up 211%
- X 2015 $15/22 bull call spread at $2.80, selling $13 puts for $2 for net .80, now $1.90 – up 137.5%
- CLF 2015 $18/28 bull call spread at $3.20, selling $15 puts for $3.10 for net .10, now $1.85 – up 1,750%
- ABX 2015 $20/30 bull call spread at $2.95, selling $20 puts for $3.30 for a net .35 credit, now -$2.25 – down 542%
- 7 QQQ Jan $65/$70 bull call spreads at $3.24, selling 1 AAPL 2015 $300 put for $22.50 for net .20, now net $22.35 – up 10,075%
So, a bit of a disappointment with ABX (which means we DD on that one!) but much more than made up for by our overachieving CLF and QQQ plays. In fact, ABX is exactly the kind of lagging play we like to make in an upturning market.
Meanwhile, we're still able to have our intra-day fun – including our pre-market happy, happy, joy, joy shorting oil – which gave us a quick $1,000 per contract gain already this morning as it fell from $108.50 to $107.50 and that's up $2,500 from yesterday's $110 short entry. We also took advantage of Friday's Syria spike to double down on our SCO and USO plays so more joy on those as the pressure mounts on the NYMEX criminals to unload their fake orders before the Sept 20th rollover.
As usual, I can only tell you what is going to happen and how I think you can make money trading it – the rest is up to you! $106.50 is our immediate goal for oil today and we should get a bounce there ahead of tomorrow's inventory report, which is the bulls last hope. If they are wise, they'll take the opportunity to sell the optimists contracts down to $105 because they'll WISH they could get $105 if we put Syria to bed before the 20th.
Now, on to making money in an up market: Trade Idea #1 is obviously that ABX play. As it stands, it takes a $225 credit on the spread and pays up to $1,000 additional dollars if gold takes off. ABX is currently at $19.20 and your net entry on the $20 puts is $17.75. Of course, since ABX is lower, we can take the more conservative route of selling the 2015 $15 puts for $2.05 and buying the $13/18 spread for $2.80 and that's net .75 so you are giving up your credit but all you need to make $425 per contract is for ABX to hold $18 by Jan 2015 and there's a 566% gain for you right there!
ISRG is a stock we like to play when it's down and they have taken a huge hit, down from $500 to $384 on disappointing earnings. Long-term, we still like them and this play is similar to AAPL, which was our big winner so, like AAPL, we can make an up play on QQQ and use ISRG as the short put to pay for it. You would be a fool to do this if you don't REALLY want to own 100 shares of ISRG for the net but we can sell 1 2015 $300 put for $23.50 ($2,350 credit) and use that money to buy 8 of the QQQ Jan $75/80 bull call spreads for $3 ($2,400) for net $50 on $4,000 worth of spreads. That makes your upside (and QQQ is already $2.83 in the money) $3,950 or 7,900% while your downside is simply owning ISRG at net $300.50 – still a 21.7% discount off the current price.
We'll put two of those in our Short-Term Portfolio to offset some of our bearish bets.
Out of time so I'll have to finish up in Member Chat. Remember, we have our Strong Bounce lines at Dow 15,140, S&P 1,662, Nas 3,640, NYSE 9,460 and Russell 1,030. These trade ideas are good only as long as 3 of 5 of them are holding!
