Market Fear Is Reverting

April 3, 2020

It’s starting to feel like the same day over and over again.

The unknown of the coronavirus is starting to become more clear.

The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX) is at 48. The VIX is still elevated but has pulled back 15 points since last week at 63.

That means panic is behind us and fear and uncertainty are starting to come out of the market.

That doesn’t mean we are going into a bull market.

We are in a bear market and will continue to see big back-and-forth swings in the broad market.

As I mentioned last week - volatility is a great equalizer.

This type of market action allows the little guy the opportunity to thrive.

We want to have some long positions due to the fact that there will be large spikes.

That means we see our positions likely the red, then turn green as we let the market come to us.

We’ve been positioned to play this, but we’ve been caught in a rip current as volatility reverts back.

This market effect has reduced premiums purchased over the last two weeks.

That is why we’ve been right in our direction, but our options contracts haven’t increased as anticipated.

That falls on my shoulders with not putting you in the best position to take the profits you deserve.

Not closing winners in a market environment such as this is discouraging and frustrating.

I have to get better and that is my promise to you every day in this service.

Every day is a new opportunity in the market.

If we’re not swinging, we’re missing.

Our losses last week, month or yesterday are part of the process.

I have a proven track record and you’ve seen firsthand that Hot Money Trader is designed to navigate through any market — targeting the best stocks for large potential moves.

We’ve racked up quick gains of 81%, 90%, and 120% while people were sitting on the sidelines.

Every week we will continue to step up to the plate, wait for the pitch and swing for the fences.

We play to win!

Let’s talk about our current positions…

Portfolio Update

  • On Monday, buy-to-open the Occidental Petroleum Corp. (NYSE: OXY) May 15, 2020, $7.5 put (OXY200515P00007500) up to $1.30 per contract or better, for the day.
  • On Thursday, sell-to-close the Occidental Petroleum Corp. (NYSE: OXY) May 15, 2020, $7.5 put (OXY200515P00007500) at the market.

Right now, our open positions are:

  • Vistra Energy Corp. (NYSE: VST) April 17, 2020, $25 call (VST200417C00025000)
  • Glu Mobile Inc. (NASDAQ: GLUU) June 19, 2020, $7 call (GLUU200619C00007000)
  • Huntington Bancshares Inc (NASDAQ: HBAN) May 15, 2020, $8 call (HBAN200515C00008000)
  • Nordsrom Inc. (NYSE: JWN) April 17, 2020, $10 put (JWN200417P00010000)

After-Action Report

Occidental Petroleum Corp. (NYSE: OXY) May 15, 2020, $7.5 put

Date: March 30, 2020

Reason: Our system flagged short-term under-market sentiment shift that would cause more weakness in the oil sector.

Outcome: Exit at 34% loss.

Notes: We took our shot and didn't fight the tape when prices spiked in the other direction. We salvaged our capital for a better opportunity and that is a win.

As always, keep sending your questions and feedback to [email protected]

We’re due for a big winner and I have a great feeling that will come next week.

My team and I will have a new trade for you on Monday morning.

To your wealth, freedom, and options!

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%