All three major indexes have been stuck like a tire in mud this week, but there’s been a lot going on under the hood.
In short, this is a crazy market, which has had us on the wrong side of it the last few weeks.
Slumps happen and they will get you down, it’s important we work through them and focus on the next trade.
Trading is probabilities at its core and with these out of the way, the probabilities say our next trade could be a winner.
Now, The CBOE Volatility Index (VIX), aka the “fear” index, is still above our key 15 levels, trading at 22 — indicating that we need to continue to be cautious for a possible shakeout.
We’ll focus on the signals and ignore the noise.
Before we talk about our newest position this week, I want to share with you a last-minute announcement.
I’m excited to announce that I’ll be part of Wealth365’s ‘Best of The Best’ event tomorrow, Saturday, January 23, 2021.
I’m scheduled to present from 12:00 p.m.–01:00 p.m. EST; I will be sharing my “The Quicker, Better Way to Trade Options.”
This is a virtual event and FREE to attend.
But if you need more of a reason to join me tomorrow, I’m giving away $2,500 in cold hard cash during my presentation.
Click here to RSVP your seat right now.
Now let’s talk shop.
Despite starting out January closing two winning trades, the last two weeks, we have had several that fell short of our profit targets.
Today, these positions expire.
Unfortunately, we don’t have more time for these positions to play out.
There’s nothing that you need to do, and they will be removed from your account over the weekend.
Taking losses isn’t fun and can be painful, but without the bitter, the sweet isn’t as sweet.
But remember…
The sweet part is making money and losses are part of the process.
Our limited risk options allow us to trade profit opportunities with greater flexibility — and much higher potential gains than buying stocks outright.
And we’ll have a brand-new batch of trades coming in a few weeks for another shot at quick profits. (So, keep your head up and focused!)
On Monday:
Buy-To-Open the Schlumberger Limited (NYSE: SLB) February 5, 2021, $26.50 call (SLB210205C00026500) up to $0.85 per contract or better, for the day.
Right now, we’re holding:
This is our debriefing of every trade closed or expired to analyze what happened, why it happened and how it can be done better — like what the military uses after missions.
Cloudera, Inc. (NASDAQ: CLDR) Jan. 22, 2021, $15 call (CLDR210122C00015000)
Date: December 22, 2020
Reason: Our system triggered a bullish signal triggered after a new $20 million How Money bet, which is a 100% surge in call options purchased.
Outcome: Expired worthless.
Notes: It’s frustrating to see a winner turn into a loser so quickly. We had a nice profit and I was on the verge of pushing out an exit the following morning from our entry. Shares paused and I decided to let it play out. A few days later we found ourselves behind the eight ball and then hoping. This is the frustrating part of trading, because if we took our profit and prices continued higher, you’d be frustrated that we sold too early. That is why I say you don’t go broke closing out winners, you go broke taking losses. Unfortunately, we got caught flat footed.
Coty Inc. (NYSE: COTY) Jan. 22, 2021, $8 call (COTY210122C00008000)
Date: December 22, 2020
Reason: Our system triggered a bullish signal after a new 12 million Hot Money bet, which is a 300% surge in new call options purchased.
Outcome: Expired worthless.
Notes: We took our shot, but this didn’t play out as I anticipated. Options are great because of the leverage, but timing is so critical. Also, every stock and option is different and tough to have a general rule like take profits at this percentage approach. This position did turn green the following day for a 10% gain. Unfortunately, similar to CLDR, this quickly turned red and we found ourselves behind the eight ball as prices traded in a tight range.
One thing to take away from these two soured positions is the importance of managing our winners because they can disappear quickly.
Let’s keep focused and let the market come to us.
And I’ll be keeping you updated every step of the way.
Have a great weekend, and I’ll have a new trade for you on Monday.
To your wealth, freedom, and options!
Joshua M. Belanger
P.S. I also have a big announcement that I’ll share with you next week that you’re going to love.