Markets started out strong this week but are soaring higher after the U.S. unexpectedly added 2.5 million jobs last month.
And in the middle of a pandemic, nationwide looting and political unrest you were able to make some fantastic gains.
As I mentioned last week, there’s a large disconnect with the stock market Vs. the main street.
Yet, the only thing matters are if we are on the right side of the market.
The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX) is holding at 24.
This is coming in 6 points lower than last week’s reading, but volatility is still elevated.
We will keep to the system and manage our winners.
Let’s talk shop...
Right now, we’re 100% in cash.
Vale S.A. ADR (NYSE: VALE) July 17, 2020, $10 call
Date: May 26, 2020
Reason: Our system spiked on sure bet activity that these options would pop higher in the coming weeks.
Outcome: Closed for 100% gain.
Notes: We played this exactly as we should with selling into strength. Looking at today’s prices, we left money on the table. That’s in hindsight and it could have turned into a loser.
Teck Resources Limited (NYSE: TECK) June 19, 2020, $10 call
Date: May 18, 2020
Reason: Our system spiked on sure bet activity that these options would pop higher in the coming days.
Outcome: Closed for a double-digit gain.
Notes: This one is a little frustrating because we held through the downturn while adding to our position. We executed as we should with selling into strength. Today’s spike higher is what we were looking for. It’s in hindsight, but that’s how close making money and losing money can be in the financial markets.
Tyson Foods Inc (NYSE: TSN) June 5, 2020, $65 call
Date: June 1, 2020
Reason: Our system spiked on sure bet activity that these options would pop higher in the coming hours.
Outcome: Closed for 50% loss.
Notes: The beauty of options is you place your trades and then let them play out because you know the full amount you can lose. This was a cheap bet and I usually let something like this play out, but the reaction on Wednesday’s news shook us out. That’s how close making money and losing money can be in the financial markets. Losing isn’t fund and this loss falls on my shoulders. We’ll get them on the next one.
I’m looking forward to next Wednesday, so make sure to send yours now to [email protected]
Have a great weekend and I’ll have a new trade for you on Monday morning.