Sparklers Lit, Bulls Party into 2020

January 3, 2020

Happy New Year!

The broad market is seeing a shallow pullback as conflicts between U.S.-Iran flare-up.

Due to this overnight tension, oil started the session up more than 4% but quickly faded.

Gold is also higher and has been creeping back to it’s September highs, which seems to be going unnoticed.

This past summer before the big run-up in gold and silver, we were seeing a lot of activity with Hot Money signals flashing which provided great profit opportunities.

We aren’t seeing anything similar to that as of yet, but I think we could in the coming weeks.

The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX), at 14 - below our key level of 15 and means, bulls are still in control.

As we come into the last hour of today's trading session, we are seeing more selling pressure.

Next week is when things will pick back - let's see if the bulls fumble the ball.

In last week’s update, I mentioned that we were reaching a level of complicity that could set up for quick snapback and that I was buying a few puts in the S&P 500.

This wasn’t an official recommendation, but I did close those out.

Let’s talk about our first winning position in the new year.

Portfolio Update

On Monday, we bought to open Transocean Limited (NYSE: RIG) Jan. 24, 2020, $7 call up to $0.42 per contract or better.

On Friday, you sold to close Transocean Limited (NYSE: RIG) Jan. 24, 2020, $7 call at $0.52 per contract for a gain of 23%!

Also, our Editas Medicine, Inc. (NASDAQ: EDIT) Jan. 3, 2020, $45 call will expire worthless on today’s market close.

There’s nothing you need to do and this position will be removed from your account Monday morning.

Right now we don’t have any open positions.

After-Action Report

Transocean Limited (NYSE: RIG) Jan. 24, 2020, $7 call

  • Date: Dec. 30, 2019
  • Reason: Hot Money signal over $800,000 in call option premium purchased in the Jan. 24, 2020 call strike.
  • Outcome: 23% gain!
  • Notes: When you’ve earned the right to make a profit, take it! Shares were volatile, but our Hot Money signal was right ahead of this big, fast gain. We sold into strength and avoided letting our profits slip away. Great job!

Editas Medicine, Inc. (NASDAQ: EDIT) Jan. 3, 2020, $45 call

  • Date: Dec. 6, 2019
  • Reason: Hot Money signal flagged an odd buyer of out of the money calls in the Jan. 3, 2020, $45 call strike.
  • Outcome: Expired worthless
  • Notes: This type of signal is typically foreshadowing a possible takeover bid. With some of the recent takeover activity in the space, it looked to be opening buyers ahead of tomorrow’s news. This was a speculative shot that had a chance to make a 10x or 20x return. It’s better to take a shot and lose than not take a shot and miss out.

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

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

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%