A Week of Winners… and Even More Opportunity Ahead By Larry Benedict, editor, The Opportunistic Trader There’s a lot to cover today after a busy week. In addition to our quad-witching trade, we opened four new trades… one of which we’ve already closed out for a tidy profit. We also closed out our United States Oil Fund (USO) call trade and our put position in Apple (AAPL). And among all that action was the 0.5% rate cut from the Fed. The size of that rate cut is going to reverberate around the markets. And as this week has shown, we’re not taking our foot off the accelerator… We’re going to keep tracking down opportunistic trades through the end of the year. In last week’s update, I covered the entry to our USO trade. We were looking for a repeat of the chart action from June when the oil price rebounded from oversold territory (brown circles). That allowed us to profit from that bounce. We were slightly early with our entry. But that’s exactly how things panned out: United States Oil Fund (USO) 
Source: eSignal (Click here to expand image) The Relative Strength Index (RSI) bullishly formed a ‘V’ and kept rallying. That propelled our trade into good profit. The RSI was approaching resistance (green line), and the oil rally appeared to be softening. So we closed out our trade for a 41.2% profit. That’s a nice gain in just 10 days. We’ve since opened a USO put option trade to capture a mean reversion to the downside. Let’s now check out our other open trades… Open Trades In the past week, we’ve opened put option positions on the SPDR S&P Homebuilders ETF (XHB) and the ProShares Bitcoin Strategy ETF (BITO). In the latter’s case, we banked a 100% gain earlier this month. And now we’re aiming to profit from a return to BITO’s long-term downtrend that began back in March. And for XHB, we’re looking for a move lower off resistance (green line): SPDR S&P Homebuilders ETF (XHB)  Source: eSignal (Click here to expand image) XHB tested the $121 level multiple times without success. Now we’re looking for a similar reversal around this level. And the key factor will be momentum… I’ll look for the RSI to reverse and track lower out of overbought territory (red circle) to drive our position into profit. Closed Trades The fourth trade we opened this week was a put option trade on iShares 20 Plus Year Treasury Bond ETF (TLT). And we’ve already closed out for a good profit. We opened the trade on Tuesday and caught the reversal right at its peak. TLT retraced lower after the Fed’s 0.5% cut, as longer-dated yields rose and bond prices traded lower. With our position in good profit, we closed out the first half of our trade just a day later for a 27.7% gain. We then sold the remaining half yesterday for a 43.4% gain. All up, that’s a quick 35.5% blended gain over just two days. This week, we also closed out the remaining half of our Apple (AAPL) put trade. If you recall, we opened this trade back in late June. We closed the first half of this trade after the August 5 meltdown. We sold half our AAPL position on August 6 for a 121.3% gain. We kept the remaining half to capture any further downside. But that didn’t work out as planned. AAPL kept recovering. At that stage, it becomes an asymmetrical bet… If you close the trade out, you only get a fraction of your initial outlay back. But if you hold on, you still have time for the stock to take another tumble. Unfortunately, that move didn’t come, and time simply ran out. We closed out the remaining half of our trade for a 94.2% loss. Yet blended with our original 121.3% win on the first half, it still works out to a 13.6% profit overall. That leaves us with open positions in Invesco QQQ Trust Series 1 (QQQ) and Nvidia (NVDA), in addition to the USO, XHB, and BITO puts mentioned above. Quad Witching Last but not least, we entered our quad-witching trade on September 17. When I sent out the first "sell half" alert the following day, we were up around 21%. But that price quickly came back in. We then closed out the remaining half later that day. Altogether, we eked out an 11.9% gain overall. It’s not as large as some of our past quad-witching gains. But it’s still a solid return for a single day’s holding time. So stay tuned for our next quad witching in December… Looking forward, this week’s rate cut is still working its way through stocks and bonds. And next week, we have a couple more items that could impact markets. We learn the latest durable goods orders on Thursday. That same day, Fed chair Jerome Powell will speak at a conference. Then we’ll see the latest Personal Consumption Expenditures (PCE) on Friday. So I’m expecting to see plenty more opportunities ahead. Keep a close watch on your inbox… And send any questions, suggestions, or other comments to feedback@opportunistictrader.com. Happy Trading, Larry Benedict
Editor, The Opportunistic Trader Download the Opportunistic Trader Mobile App To make sure you don’t miss any alerts or updates, please download the free Opportunistic Trader Mobile App for iOS or Android. The app enables you to get notifications whenever we publish something new. Make sure push notifications are enabled through your phone settings to receive alerts from the app. You can also access all of your subscriptions and view portfolios. And if you use the app and find it valuable, consider leaving us a review on the App Store or Google Play page. | | 
Tidak ada komentar:
Posting Komentar