Election Volatility Spikes - Here’s What to Do

October 28, 2020

We’re less than a week from Election Day and it’s looking to be a November to remember.

Stocks started off the week soft moving back to those late September lows.

The good news is that we’re seeing some stability in today’s lows.

With stimulus headlines in the rearview mirror, the headlines will focus on coronavirus and U.S. elections.

We’re in the middle of earnings season and so far, earnings have beaten Wall Street bottom-line expectations.

But the market had already priced that; the weakness is about twisting the taxpayers’ arm for more stimulus.

The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX) is holding at 38.

That’s an increase of 41% since Friday and 3x the normal expected volatility.

Most will see a down market like this and panic at the lows.

But that’s the wrong way to trade.

We’re going to continue sticking to our current game plan.

Follow the system and focus on price, not politics.

The great thing about the Hot Money Monitor is it works in any type of market — especially the one we’re in right now.

In fact, we are sitting in green with our newest position this week.

Portfolio Update

On Monday:

  • Buy-To-Open the Tower Semiconductor Ltd. (NASDAQ: TSEM) Nov. 20, 2020, $21 call (TSEM201120C00021000) up to $1.05 per contract or better, for the day

Right now, we’re holding:

  • Hostess Brands Inc. (NASDAQ: TWNK) Dec. 18, 2020, $15 call (TWNK201218C00015000)
  • Tower Semiconductor Ltd. (NASDAQ: TSEM) Nov. 20, 2020, $21 call (TSEM201120C00021000)

Let’s keep focused and let the market come to us.

And I’ll be keeping you updated every step of the way.

Your Questions, Answered!

The mailbag is full, so let’s get to your most pressing questions.

“Hi, Joshua,

Can big banks hide their options plays, like a dark pool? - Bill P.

Hi Bill,

That is the great thing with options.

Options don’t lie!

We never know why a trader is making a bet, we can only assume. But we do know that when a trader puts a lot of money on the line, they believe prices are going to move in their favor. That is the bread and butter of the Hot Money monitor.

The next question is from a new member of the club

I’m at a loss when it comes to the jargon associated with trading and stocks, options, etc.

I’m still navigating my broker account and I’m having difficulty locating when to buy, let alone sell.

You have honored your word by stating you would give us a step-by-step tutorial, but these “simple” instructions are losing me. - Richard B.

I understand your frustration.

Starting anything new is going to be tough, and that’s exactly why we are here to help you shorten that learning curve.

If you’re like most, you’re likely overthinking.

I lost my whole account on my first options trade 16 years ago, I was devastated.

I’m here to help you avoid that so take it slow.

In a short time, you'll see the fruits of your labor pay off.

All the jargon will take time.

Patience and persistence are key. We will continue to provide material to help you along the way. In a short time, you'll see the fruits of your labor pay off.

And if something specific is confusing you, please drop me a line.

That’s it for me today, be on the lookout for our next profit alert!

If you want your questions answered next week, make sure you email it in today at [email protected]


Joshua M. Belanger

Joshua M. Belanger
Joshua Belanger is founder of CounterVest and the editor of Hot Money Trader. He has been providing ordinary investors blockbuster returns since 2008. In 2018, the average return of Hot Money Trader beat the markets by over 15%