Be careful out there!
That's how I often close my posts but I want to double-plus emphasize it this morning as we have the 4th of July next Tuesday and there will be very few Americans working on Monday (US markets close at 1pm) – as it's the perfect chance to take a long weekend. In fact, next week is likely to be the slowest trading week of the year but that makes it very dangerous because any kind of panic into low volumes can cause a sharp sell-off so BE CAREFUL OUT THERE!
We already took our winning commodity trades off the table (you're welcome) in an Alert I sent to our Members at 5:36 becasue we had nice pre-market moves up in oil, gasoline, natural gas – even coffee – all of our weekend longs, in fact. These are the same trades we discussed in Wednesday's Live Trading Webinar and, of course, in Thursday morning's PSW Report, where I said:
Gasoline (/RB) is a bit more encouraging, already racing back to $1.435 (up $630 per contract) after hitting $1.395 on yesterday's lows. $1.42 is our long spot on /RB with tight stops below so it's game on again this morning, as it is with Oil (/CL) at $42.50 – if you are brave. We still like Coffee (/KC) at $122 but it doesn't like us and Natural Gas (/NGV7) went from $2.95 to $3 (up $500 per contract) yesterday and now it's back at $2.95 so why not take it again?
Why not indeed as we cashed in 2 longs for another $1,760 profit on the rejection at $3.05 and that's certainly good enough for 2 day's work, right? We teach people how to trade Futures contracts every Wednesday in our Live Trading Webinars as well as every day inside Philstockworld – you can join us HERE.
Once you pick up a good trading channel, you can make these same trades over and over again for quick profits like this and that's the best way to get started trading Futures – quick in and out trades with tight stops to limit your losses. I also mentioned a couple of other trade ideas on Thursday morning:
Index-wise, we are forcing ourselves to find bullish trades because the Nasdaq 100 (/NQ) is back over our 5,780 resistance and now we'll see if they can get over 5,800 and we're off to the races for our next major up-leg to 6,000 (3.8%) and the way to play that is to go long on the Russell (/TF) over the 1,400 line with tight stops below but only if the Nasdaq is over 5,780 and it will need to hold it all day today for us not to start shorting at that same line (/NQ 5,780).
In yesterday's Live Trading Webinar, we decided to go long on the Biotech Ultra-ETF (LABU) with a nice $4,500 spread that will net us $15,000 (up 255%) by December if LABU hits $70. As you can see, we're well on our way already as it really took off into the close!
As you can see, LABU blasted over our $70 target already so we're well on track on that trade and, in case you like keeping score:
- Gasoline (/RB) out at $1.435 (again) – up $630 per contract (again)
- Oil (/CL) out at $43.50 – up $1,000 per contract
- Coffee (/KCU7) out at $125 – up $1,125 per contract
- Natural Gas (/NGV7) out at $3.035 – up $880 per contract
- Russell (/TF) out at 1,417 – up $1,700 per contract
That's a nice $5,335 profit (per contract!) just from our Thursday morning trade ideas – not a bad way to get us started into the holidays and you can see why we cashed out this morning – why risk great gains? We can always find something else to trade and, in fact, Silver (/SI) just dove to $16.225 but it already back at $16.45 and we like it long here with tight stops below and especially over the $16.50 line again (tight stops) as it's down with gold, which is down on news that India will be restricting ownership in the World's top retail gold consumer.
On the whole, it's not a big enough deal to keep gold down (we like /YG over $1,250 with tight stops below) but there's no reason at all that Silver should suffer too – they just tend to trade in tandem as, usually, anything affecting one would affect the other as well. See, it's not hard to play the Futures – just read the news, watch for irrational selling or buying and bet against it.
I'm heading over to the Nasdaq this morning to do Facebook Live with Jill Malandrino and we'll be reviewing the new portfolio we set up for the Nasdaq in April and, so far, our 3 trade ideas are all on track and, most importantly, well-balanced as even our hedge is making money – despite the rising Nasdaq. Why is that? Because we know how to "Be the House – NOT the Gambler!" and it's evident in all the trades we're teaching over at the Nasdaq:
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Our Gilead (GILD) trade is up $950 from our net $4,450 entry, which is +21.3% in two months so far and on track for the full $5,550 gain we expected. As the net is still just $5,400 and there's still $4,600 of upside, this is still good for a new trade. In this trade we took a simple bull call spread and, by taking an in-the-money call for ourselves, we were able to sell all of the risk for a premium to some other sucker, who thought GILD was going to be over $70 by Jan 2019 but he needs it to be over $77.30 to break-even while we netted in for $64.50 and, while our profits are capped at $5,500 (at $70), our chances of getting to that 122% gain are excellent and I'll take good chances to make 122% every time!
Fiat-Chrysler (FCAU) hasn't really gone anywhere since we started the trade but it was only a net $1,000 spread and, because we sold more risk than we bought (and here we sold puts as well as the bull call spread), our Gamblers are losing much more than we (the House) is so we are net up $325 (32.5%) in just over a month and off to a good start. This trade will net $4,000 if all goes well so $325/month is exactly what we expect to be making to be on track.
Since this is a Nasdaq (our sponsor) portfolio, we're using the Nadaq to hedge and here we took a bear put spread on the ETF (QQQ) when we thought the market was toppy on May 31st. It's up just $185 (4.1%) so far but that's fine as it's a hedge, portfolio insurance, we don't expect to make money – it's there to protect our other positions from taking losses when (and if) the market does finally correct.
And that's what I want to emphasize this morning – especially into a holiday weekend. It's much nicer to go on vacation knowing your assets are protected and good hedges will do that for you and, if you know how to BE THE HOUSE – you can let other people take the bulk of the risk (that QQQ will fail $136) while you take the sensible insurance play (that QQQ will test support). The Nasdaq spread above is still good for a new trade at net $4,653 as it pays $11,000 if QQQ falls below support at $136 and, if not, just our first two trades are likely to stay on track for $9,500 worth of gains – more than double what we're spending on the hedge and, of course, having the hedge gives us confidence to take more long positions down the line.
Tune in this morning (10:30) when we'll discuss hedging and we'll continue to build this portfolio throughout the year – as it's good to see how we create a PSW-style portfolio from scratch.
And please – be careful out there!
