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September 01, 2020 10:27am
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Weakening Wednesday – Markets Turn Down Ahead of the Fed

Wheeeee, isn't this fun?   It sure is when you are prepared.  We added a bunch of hedges on Friday to our Short-Term Portfolio and the two short Russell Futures ( /RTY ) contracts we picked up in  yesterday morning's PSW Report are already up $5,000 and that's plenty for us to make a non-greedy exit at the 2,300 line as that's bound to be a little bouncy in the very least.  Congratulations to all who played along at home!    Remember, I can only tell you what is likely to happen and how to profit from it – the rest is up to you. When you make $2,500 per contract you need to protect your gains.  As we neared 2,300 yesterday, it was a 50-point fall so the weak bounce would be 10 points higher (20% of the fall), according to our fabulous 5% Rule™ and a strong bounce would be 10 more points to 2,320 so that became our stop and we didn't spend more than 5 minutes above that line so the stops didn't trigger but now that we're hitting goal at 2,300 – there's no reason to be greedy and we look for a "fresh horse" to bet on – an index that hasn't fallen like the others – yet.       As you can see, the Dow has fallen less than the other indexes in this sequence so now we pick lines and, in this case we have, of course, 2,300 on /RTY , 13,000 is a great line on the Nasdaq ( /NQ ) and we'll use 3,940 on /ES and, if two out of 3 of those fail, we can short the Dow ( /YM ) as our lagging indicator and that would then be confirmed by our 3rd cross lower and then, if ANY of our indexes poke back over their lines – we get out quick as our premise is only IF all the indexes keep falling we take the fresh horse out for…

Wheeeee, isn't this fun? 

It sure is when you are prepared.  We added a bunch of hedges on Friday to our Short-Term Portfolio and the two short Russell Futures (/RTY) contracts we picked up in yesterday morning's PSW Report are already up $5,000 and that's plenty for us to make a non-greedy exit at the 2,300 line as that's bound to be a little bouncy in the very least.  Congratulations to all who played along at home!  

Remember, I can only tell you what is likely to happen and how to profit from it – the rest is up to you.

When you make $2,500 per contract you need to protect your gains.  As we neared 2,300 yesterday, it was a 50-point fall so the weak bounce would be 10 points higher (20% of the fall), according to our fabulous 5% Rule™ and a strong bounce would be 10 more points to 2,320 so that became our stop and we didn't spend more than 5 minutes above that line so the stops didn't trigger but now that we're hitting goal at 2,300 – there's no reason to be greedy and we look for a "fresh horse" to bet on – an index that hasn't fallen like the others – yet.

   

As you can see, the Dow has fallen less than the other indexes in this sequence so now we pick lines and, in this case we have, of course, 2,300 on /RTY, 13,000 is a great line on the Nasdaq (/NQ) and we'll use 3,940 on /ES and, if two out of 3 of those fail, we can short the Dow (/YM) as our lagging indicator and that would then be confirmed by our 3rd cross lower and then, if ANY of our indexes poke back over their lines – we get out quick as our premise is only IF all the indexes keep falling we take the fresh horse out for…
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