Option Investor
Newsletter

Daily Newsletter, Monday, 1/25/2016

Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

Waiting For The Fed

by Thomas Hughes

Click here to email Thomas Hughes
It's Fed week and once again the market is wound up, waiting for the news.

Introduction

Fed meeting week has rolled around once again and once again the market is at a potential turning point, waiting for the event to occur. There is little expectation for another rate hike this go round but the statement and the FOMC's outlook will fuel speculation.

Global trading was mixed today. Asian indices were able to make gains but those in the EU and US did not. Asian indices closed with gains near to or just above 1%, those in the EU close with losses in the range of -0.25% to -0.5%. Oil prices are most likely the reason for today's declines, WTI and Brent both fell below $30, erasing Friday's gains.

Market Statistics

Early futures trading indicated a negative open for the US indices all morning, if a small one. The SPX was indicated to open with a loss of -6 points and this level held fairly steady all morning and going into the opening bell. After the opening bell the indices moved lower in choppy trading to post intraday losses near -0.75% . Intraday lows held until just after 3PM. At that time the market broke through intraday support and moved to new lows led by the transports. The late day sell-off intensified into the final half hour of trading and left the indices near their lows at the close.

Economic Calendar

The Economy

No official economic data releases today but nonetheless the economy was affecting trading today. The big event of the week is the FOMC meeting and policy statement on Wednesday afternoon. The second biggest is probably going to be the 4th quarter GDP first estimate on Friday. Between then an now are the Case-Shiller 20 City Index, Consumer Confidence and Housing Index on Tuesday; New Home Sales on Wednesday; Initial Claims, Pending Home Sales and Durable Orders on Thursday and then Employment Cost Index, Michigan Sentiment and Chicago PMI on Friday.

Moody's Survey of Business Confidence fell by -2 points to hit a new low. The index remains high by historical standards but has continued the slide begun last summer. Mr. Zandi says that financial market turmoil is to blame and under current conditions sentiment "appears fragile".


Earnings season is underway and not looking great at this time, primarily due to oil prices and some earnings misses in the financial sector. According to FactSet, the blended rate for earnings is now -6.0%, down from -5.9% last week and -5.3% the week before due to downward revisions within 6 sectors. I still think we can expect to see this rise by the end of the season but at this time no sign of that is present. So far 15% of the S&P 500 has reported; 73% of those have beaten on earnings but only 49% have beaten on revenue with another 27.2% of the index reporting this week.


Energy is the lagging sector for the quarter. The sector is expected to see earnings declines greater than -72.0%, down from -65% earlier in the quarter. With prices at current levels earnings growth is not expected until the 2nd quarter of 2016 at the earliest. 1st quarter earnings growth in the energy sector is now expected to be greater than -60%, down from -6% just a month or so ago. Looking further out earnings growth is expected to return in the second quarter but leave full year 2016 growth near -30%. Looking even further out 2017 earnings growth is project to be greater than +90%.

First quarter earnings growth, for the entire S&P 500, is now expected to be -1.7%. This is due to the massive downward revisions see in the energy sector. Positive growth is not expected until the 2nd quarter, about 2.3%, with that expanding into the end of the year, +6.5 in Q3 and +14.4 in Q4. The Consumer Discretionary sector is expected to lead positive growth in both the 1st quarter and the full year, near 15% for both. The first estimates for 2017 are coming out as well, FactSet is predicting about 13%.


The Oil Index

Oil prices fell in today's trading, reversing most of the gains seen during Friday's short covering rally. WTI fell nearly -6%, Brent just over -5%, both trading just below $31 and very near the $30 level. So far as I can tell there is still no reason to think that the supply and demand situation is changing so prices are likely to persist at these levels if not mover lower again. Production remains high, supply and storage remains high, demand remains low; oil may not reach new lows but there is little reason to get bullish on prices. According to FactSet, the average of 51 estimates of 2016 average oil prices are higher than 2015, but only by $0.15, so I think at best we can expect prices to stabilize between $40 and $50 although I don't see that rally starting now.

The Oil Index fell about -4.48% in today's session, dropping back below the 78.6% retracement level. This move is not a positive for sector bulls and closes the gap formed with Friday's candle. The indicators suggest a test of resistance may come but are otherwise weak and consistent with a relief rally within a a down trend. If the index is able to move higher resistance above 950 is near 1,000 and the short term moving average. If the index remains below 940 a move to retest the support at 900 is likely.


The Gold Index

Gold prices are getting a boost from diminished expectation for aggressive FOMC rate hiking in 2016. The ECB and the BOJ has set the dollar up for potential strength should either bank act but that potential is also tied to FOMC policy. If they do not give the market reason to think they will stay on track in 2016 the dollar could fall versus the euro and yen, or at best remain stable near current exchange levels. If the dollar weakens gold prices will likely continue to rise with targets near $1125 and $1150. If the FOMC sounds hawkish, combined with the already dovish ECB and BOJ, gold prices could fall back to test the lows near $1050.

The gold sector got a boost from the rise in gold prices, the miners ETF GDX rising more than 2.5%. Today action is a sign the market thinks the sector could rise but a very tentative one. The candle is a small spinning top just above the $13 support and below the short term moving average. The indicators are mixed, basically bearish but consistent with a bounce from support. In the near term, price action appears to be holding near the long term low with focus on the FOMC meeting, the dollar and gold prices.


In The News, Story Stocks and Earnings

The Dollar Index fell about -0.25% in today's session but remains perched near the midpoint between support and resistance targets. The indicators are exceedingly weak and without direction, leaving the index open to sharp movement in either direction, the FOMC meeting the most likely catalyst. Upside target is just above $100, downside target is near $98.25.


McDonald's was the star of the early morning session and one of today's market leaders. The global fast food giant reported a beat on earnings, revenues and comp store sales driven on turn-around efforts of new CEO and the new all-day breakfast menu. Consensus estimate for earnings was $1.23, actual was $1.31. Global comps were +5%, led by the US +5.7%. Shares of the stock jumped on the news during the early session, gapped up at the open but sold off during the day. Shares managed to close with a gain and look like they could continue higher. The indicators are confirming the break-out, the candle suggesting their may be a test of support before it moves on.


DR Horton also reported before the bell. The home builder reported revenue in-line with estimates and earnings that beat by a penny, along with other positive data, but did not inspire investors. Revenue rose by 4%, sales order rose by 12%, margin improved by 40 bps and back log is up by 16% and yet shares of the stock fell by -5% in today's session.


The banking sector has reported except for a string of small operators. The results are mostly in and they are not that great. The sector was expected to show growth in the range of 8.5% but so far has only produced 4.5% resulting in a near 1% on full year projections. The sector is also lowering outlook for Q1 and the full year. Q1 is now negative -0.5%, down from +2.5% at the beginning of the season, and full year is down to +8.6% from +9.4%.

The XLF Financial Sector SPDR is trading near a 12 month low and forming a pattern that could turn out to be a flag. The sector has been moving lower in the near term, is trading at 12 month lows, has bearish indicators strong and consistent with consolidation while earnings expectations are in decline. Is so, such a move would have a target near $19. The FOMC may be the trigger here too, rate hike outlook could impact earnings outlook across the sector.


RAMBUS reported after the bell. The chip maker announced better than expected revenue, earnings and guidance along with plans to make an acquisition. The stock jumped on the news, gaining 4% in after hours trading after closing with a loss near -1.5% .


The Indices

The market sold off today on a lack of data, mixed earnings and anticipation of the FOMC meeting. Today's action was led by the Dow Jones Transportation Average which lost about -1.86% and fell back to support levels near the recent low. The indicators are rolling over into what may become a bullish signal but for now simply consistent with bear market consolidation. Longer term, the past two MACD peaks are divergent from the recently set low and suggestive of support. Support target is between 6,500 and 6,600, if a bounce solidifies upside target is near 7,000, if support fails downside target is 6,000.


The NASDAQ Composite lost a little more than -1.55% and fell below 4,550. The index appears to be making a run for support with target possibly as low as 4,400. Today's candle is long and black, closing well below the previous candle, marking a peak and indicating lower prices. The indicators are mixed with bearish bias, consistent with bear market rally yet suggestive support will be retested, also consistent with the candle signal. Support targets may be reached before the Fed meeting but I don't think a decisive move in either direction will happen until Wednesday afternoon at the earliest.


The S&P 500 made the next largest decline, about -1.56%. The broad market fell from Friday's high to test support at 1,900, fell through and created a long black candle. Today's candle is a Dark Cloud Cover, a bearish signal within a near term down trend and suggestive of lower prices. Next target for support is 1,860 with 1,850 just below that. The indicators are rolling over in the near term and could become a buy signal but have yet to confirm, at this time they are merely showing a bounce from support that may be fading. In the short term MACD peaks are convergent with the recent low and suggestive it will be tested again, stochastic is oversold but pointing higher and about to cross above the lower signal line. If support holds and the index can get back above 1,900 upside target is near 1,980. If not downside targets are below 1,800.


The Dow Jones Industrial Average made the smallest decline in today's session, only -1.30%. The blue chips created a long black candle that closed below the Friday low, engulfing the previous candle and forming a dark cloud cover. This points to lower prices, in line with the near term down trend, with a target between 16,500 and 16,750, near the recent low. MACD momentum is convergent with the recent low so a retest at least should be expected, if not a new low. Stochastic is set up for some near term selling but is otherwise oversold. If support is broken down side target is near 15,000.


I'm still bullish for the long term and expecting a bounce to form but it is getting harder to stay so. The earnings led rally I have been expecting is still expected but, like the proverbial carrot on a stick, keeps slipping away. The ray of light, the silver lining, is that most of the weight of earnings declines falls on the shoulders of the energy sector. It sucks for them but otherwise is a plus for the rest of the economy.

It may all come down to the Fed and the dollar. If the Fed is more dovish and weakens the dollar outlook it could lead to a broad market rally. I say this because a weaker dollar will help improve currency impact for companies and firm forward earnings outlook for the broad market, help stabilize the commodities market and possibly put a bottom into oil prices.

Until then, remember the trend!

Thomas Hughes


New Plays

Fed On Hold

by Jim Brown

Click here to email Jim Brown
Editor's Note

The FOMC meets this week but the meltdown in the U.S. markets along with China and Japan suggests they will not hike rates again until June. Let's bet on that impact.


NEW BULLISH Plays

No new bullish plays


NEW BEARISH Plays

KRE - Regional Banking ETF

We were knocked out of the long position on this ETF with the drop below support this morning. The keywords in that sentence were "drop below support." Typically, when long-term support breaks we are looking at a continued decline that could be material.

Regional banks are tanking because of their loans to energy companies and to firms that service those energy companies. That includes restaurants, service stations, apparel stores, mom and pop businesses of all types that catered to the families of the 150,000 energy workers that have been laid off.

In addition, the U.S. manufacturing sector is in recession. With energy, manufacturing, transportation already in recession the odds are increasing that the country is going to be headed in that path as well.

Today, the Texas Manufacturing Outlook Survey for January fell from -20.1 to -34.6 and the lowest level since 2008. The outlook for the U.S. economy is not good and that means regional banks could be facing rising defaults.


I hate to go straight from a long position to a short position but in this case, the situation appears to be right. We entered the long position on a dip to support at $35. There was an immediate rebound but then that support failed today based on economic news.

I am recommending we short the KRE ETF with a tight stop at $36.45.

Short KRE at the open, currently $34.26, stop loss $36.45.

Optional:

Buy long March $33 put, currently $1.28, stop loss $36.45

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.




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In Play Updates and Reviews

Pre Earnings Weakness

by Jim Brown

Click here to email Jim Brown
Editors Note:

This is the busiest week in the Q4 earnings cycle with more than 100 S&P-500 companies reporting. That may have given investors one more reason to take profits.

Falling crude prices also weighed on the market and that is a factor we are going to have to get used to for the next two months. Inventories normally build through March so we are just getting started. Iraq announced they hit a new record for production and Iran is adding a million barrels per day to the market over the next six-weeks. Oil prices would have a tough time rising in that scenario.

It is possible for equity prices to disconnect from oil prices but it rarely happens. The correlation over the last three months has been 96%. That is about as high as it can go.

Just like one day up on Friday did not make a trend, one day down today is also not a trend. However, there are more factors working against equities today than in their favor.


Current Portfolio


We are changing the format slightly this week. The entry date, earnings date, current price, change for the day and stop loss are all in the portfolio graphic. They will no longer be listed in the individual play descriptions. Everything you need is now available in a single location.




Current Position Changes


KRE - Banking ETF

I raised the stop loss to $34.65 in the last newsletter and we were stopped when that level was hit today.


SWHC - Smith & Wesson

The bullish play was triggered at the open this morning when SWHC traded at $21.35.


SSYS - Stratasys

Short entry was triggered at the open this morning.


Stop Loss Updates

Check the graphic above for any new stop losses in bright yellow. We need to always be prepared for an unexpected decline.



BULLISH Play Updates

KRE - SPDR S&P Regional Banking ETF

Comments:

We were stopped on the short on KRE when the stock dipped to $34.65 this morning. There was no stop loss on the option position. We entered the option at 63 cents and I recommended continuing to hold it in hopes of a banking rebound over the next two months.

However, the regional banks were very negative today and KRE declined well below support. With the Fed not likely to hike rates until June it appears the banks will continue to be sold.

I am recommending today to close that call position, currently 29 cents.

Original Trade Description: January 13, 2016:

Many people thought banks would be winners after the Federal Reserve hiked rates in December. While the Fed did raise rates (barely) the financial stocks didn't see much progress.

The Fed is still talking about raising rates multiple times in 2016. There is a growing camp of market watchers who believe the Fed will be forced to back track. Deteriorating economic conditions both in the U.S. and abroad may force the Fed to pause their rate hike plans or even cut rates again.

Even if the Fed does try to raise rates the yield curve, where many banks make their money, could struggle. If the stock market remains sour throughout 2016 it will drive money into the perceived safety of U.S. bonds and that will keep yields on the 10-year low. So now that I have painted a rather unappetizing picture for the banks I'm adding a new bullish play.

All of the issues above are long-term troubles that could plague financials throughout 2016. On a short-term basis the banks are oversold and due for a bounce. Tonight's trade is a short-term technical one. The KRE is nearing major support and should rebound.

If you are not familiar with the KRE it is an ETF that tracks the S&P regional banks select industry index. The top ten holdings in this ETF are: PNC, BBT, KEY, STI, HBAN, CIWV, RF, FITB, MTB, ZION,

You can see on the daily chart below the KRE is plunging. On the weekly chart I have highlighted long-term support at the $35.00 level. Odds are good that if the KRE is going to bounce that is the spot to watch. Tonight I am listing a buy-the-dip trigger at $35.50. We will start this trade, if triggered, with a stop loss at $34.40. Remember, this is a short-term trade. We want to get in, catch a bounce, and get out.

Position 1/20/16, closed 1/25/16:
Closed: Long KRE shares, entry $35.50, exit $34.65, -.85 loss.

Optional:

Close Long March $38 call @ 63 cents, currently 29 cents.



SWHC - Smith & Wesson

Company Description

Comments:

S&W spiked to $21.71 shortly after the open this morning to trigger the play entry at $21.35. The stock showed good relative strength with a minor gain for the day in a bad market.

Original Trade Description: January 21st.

Smith & Wesson is a gun manufacturer. Business has been very good but they announced this week they are looking for some acquisitions in other outdoor areas so their business is not so tied to the cycles in gun sales. Whenever an administration begins talking about more gun control measures their sales soar. When there are no politicians trying to ban guns we see sales decline.

The current administration has been the best for gun sales since the Clinton assault weapons ban. The FBI said the increase in the number of background checks for gun purchases has been so strong that their system is overloaded and they have had to halt appeals for denials until they can add some more personnel.

December saw a record of 3.3 million background checks, which was more than 500,000 above the prior record for December in 2012. On Black Friday alone there was a record 185,345 checks and a new single day record.

While this surge in gun sales has powered Smith & Wesson to record profits the company realizes that the election of a pro gun administration will slow those sales. For this reason S&W announced this week they were looking into getting into the $60 billion outdoor sporting goods market. They will likely be trying to acquire brands that they can add to their lineup that are not directly related to guns.

S&W said they were on the hunt for candidates but did not have any announcements at the current time.

This is a good move for S&W for obvious reasons. By branching out into other products, it will also help widen the S&W brand even if those new products have their own brand names.

Shares spiked to record highs over $26 when they reported earnings in early January. The post earnings depression appears to be over and shares dropped back to support at the 100-day average. This is a good spot for people to launch new long positions and once the current market weakness is over the small cap stocks like S&W with strong growth will be in demand.

Earnings March 8th.

Position 1/25/16:

Long SWHC shares @ $21.35, initial stop loss $18.85

Optional:

Long June $23 call @ $1.75, initial stop loss $18.85.



UFPI - Universal Forest Products

Company Description

Comments:

UFPI gave back -4% today after gaining about 4% on Friday. With earnings only 3 weeks away, I raised the stop loss to $63.50. If there is going to be further weakness we want to exit now.

Original Trade Description: January 16th

UFPI recently experienced a -20% pullback from its December 2015 highs but shares are still trading at levels not seen for almost ten years. More importantly it appears that the correction is over.

UFPI is in the industrial goods sector. According to the company, "Universal Forest Products, Inc. is a holding company with subsidiaries throughout North America and in Australia that supply wood, wood composite and other products to three robust markets: retail, construction and industrial. The Company is headquartered in Grand Rapids, Mich., and is celebrating its 60th year in business."

The big surge in the stock in mid October was a reaction to the company's Q3 earnings report. It was a record-breaking quarter for UFPI in spite of a -17% drop in the lumber market. Here is an excerpt from the company's earnings press release:

"UFPI announced record-breaking 2015 third-quarter results. The Company posted the best third-quarter earnings in its history with net earnings attributable to controlling interests of $25.6 million, an increase of 32.9 percent over the same period of 2014. It also posted the highest year-to-date net earnings in its history, at $61.7 million. Earnings per diluted share were $1.26 in the third quarter of 2015, up from $0.96 in the third quarter of 2014. Net sales of $762.3 million for the third quarter were up 6.8 percent over the same period of 2014."
The stock has been trading very technically with investors keying in on support and resistance levels. Shares of UFPI did see a rough December after a downgrade on December 8th. However, after a -20% pullback investors started buying UFPI last week. That is noteworthy since the broader market was crashing lower last week. You'll notice on the daily chart that UFPI found support at its simple 200-dma and delivered a pretty good gain for the week.

We think this bounce continues and want to hop on board. There is very short-term resistance at $67.00. Tonight we are listing a trigger to launch bullish positions at $67.15. Investors may want to limit their position size to reduce risk since UFPI has proven itself to be somewhat volatile.

FYI: UFPI does have options but the spreads are too wide to trade them.

Position 1/19/16:

Long UFPI stock @ 67.37, stop loss 63.50




BEARISH Play Updates

OIH - Oil service Index

ETF Description

Comments:

The short squeeze in WTI has faded and the OIH is moving back towards its lows. If we had not been filled initially on the gap up on Thursday we would already be profitable.

Original Trade Description: January 20th

The OIH ETF represents 25 oil service stocks including Schlumberger, Halliburton and Baker Hughes. Once you get past those three largest holdings the rest of the pack has little balance sheet strength and we could easily see multiple bankruptcies or credit defaults. The bottom of the list contains Tidewater (TDW), Carbo Ceramics (CRR), Seadrill (SDRL), etc. The risk of default is high for the bottom half of the list. View Full List

The "perceived" bounce in oil prices by shifting to a new contract at $28.81 instead of the $26.55 close may cause some investors to buy energy stocks in a knee jerk reaction. Do not be fooled. The bottom in oil prices is still ahead.

The API Inventory report tonight after the close showed a larger than expected gain of 4.6 million barrels of oil and 4.7 million barrels of gasoline. The more accurate EIA inventory report comes out at 10:30 on Thursday.

The inventory build season runs from January 6th to the end of April. Last year inventories rose a whopping +106 million barrels to record levels during that period. There is not likely to be another rise like that because there is very little available storage capacity in the USA. Canadian oil is now selling for $15 below WTI because all the Midwest storage locations are virtually full. Bakken oil is selling for $8-$10 below WTI prices for the same reason plus transportation is expensive to other locations.

I believe we will see WTI at $25 or below over the next two months and possibly even $20 because of the price pressure from the Iranian oil sales. They have about 50 million barrels stored on tankers and that oil is now available for sale. Prices are going lower.

This will probably drag the equity market lower as well but eventually there will be a disconnect between equities and oil prices at some level. The constant headlines about lower oil prices will eventually become old news. Of course, key levels like $25, $22, $20 could cause some additional market weakness.

Energy stocks will continue to react to the low oil prices because every dollar of decline is very painful and impacts their ability to service debt and keep the doors open. Analysts claim as many as 50% of the U.S. producers could default or worse if prices remain low for very long.

I am recommending we short the OIH and expect to hold the position until April. The plan will be to close it about the time inventories top out in early April. We could see a minor uptick at the open on Thursday because of the new front month contract. When inventories are announced at 10:30 we should see a decline in WTI if they are high as expected.

Position 1/21/16:

Short OIH shares @ $21.26, stop loss $24.25

Optional:

Long July $20 put @ $1.92, no initial stop loss.



SSYS - Stratasys Ltd

Company Description

Comments:

The short entry was triggered at the open this morning when SSYS moved below $17.45. I expect a new low later this week.

Original Trade Description: January 22nd.

Stratasys is a maker of 3D printing systems and parts. The company makes parts for other equipment using its proprietary 3D printing systems. They manufacture for sale production systems under the Dimension, Objet,Fortus, Polyjet, SolidScape and MakerBot brands.

While the 3D printing business is expanding in scope and acceptance all around the world the excitement over 3D stocks has faded. XONE, DDD and SSYS shares have been fading since their peaks back in 2013. Stratasys closed at a new six-year low on Friday despite a minor rebound with the rest of the market.

I debated which 3D stock to short and picked SSYS because of the identifiable trend and it has farter to fall than competitor 3-D Sys Corp (DDD). That stock is cheaper at $7.41 if you would rather have less at risk.

The decline in Stratasys accelerated since mid December. There have been two small rebounds along the way. I see the rebound from the 6-year lows last week as an opportunity for a short at a higher level. This gives us an obvious stop loss at $19.50 and the odds are good we will see a new low in the weeks ahead.

Earnings are March 2nd.

With a SSYS trade at $17.45:

Sell short SSYS shares, initial stop loss $19.50

Optional:

Buy long March $15 put, currently 90 cents, initial stop loss $19.50



VXX - VIX Futures ETF

Comments:

Minor rebound on the declining market. We can thank falling oil prices. Volume was not heavy and there was no conviction today. Be patient. The volatility will eventually die.

Original Trade Description: August 24, 2015

The U.S. stock market's sell-off has been extreme. Most of the major indices have collapsed into correction territory (-10% from their highs). The volatile moves in the market have investors panicking for protection. This drives up demand for put options and this fuels a rally in the CBOE volatility index (the VIX).

You can see on a long-term weekly chart that the VIX spiked up to levels not seen since the 2008 bear market during the financial crisis. Moves like this do not happen very often. The VIX rarely stays this high very long.

How do we trade the VIX? One way is the VXX, which is an ETN but trades like a stock.

Here is an explanation from the product website:

The iPath® S&P 500 VIX Short-Term Futures® ETNs (the "ETNs") are designed to provide exposure to the S&P 500 VIX Short-Term FuturesTM Index Total Return (the "Index"). The ETNs are riskier than ordinary unsecured debt securities and have no principal protection. The ETNs are unsecured debt obligations of the issuer, Barclays Bank PLC, and are not, either directly or indirectly, an obligation of or guaranteed by any third party. Any payment to be made on the ETNs, including any payment at maturity or upon redemption, depends on the ability of Barclays Bank PLC to satisfy its obligations as they come due. An investment in the ETNs involves significant risks, including possible loss of principal and may not be suitable for all investors.

The Index is designed to provide access to equity market volatility through CBOE Volatility Index® (the "VIX Index") futures. The Index offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects market participants' views of the future direction of the VIX index at the time of expiration of the VIX futures contracts comprising the Index. Owning the ETNs is not the same as owning interests in the index components included in the Index or a security directly linked to the performance of the Index.

I encourage readers to check out a long-term chart of the VXX. This thing has been a consistent loser. One market pundit said the VXX is where money goes to die - if you're buying it. We do not want to buy it. We want to short it. Shorting rallies seems to be a winning strategy on the VXX with a constant trend of lower highs.

Today the VXX spiked up to four-month highs near $28.00 before fading. We are suggesting bearish positions at the opening bell tomorrow. The market volatility is probably not done yet so we are not listing a stop loss yet.

Position 8/25/15:
Short VXX @ $21.82, no stop loss.

Second Position 9/2/15:

Short VXX @ $29.01, no stop loss.

Trade History
11/07/15 adjust exit target to $16.65
11/02/15 adjust exit target to $16.50
10/19/15 add an exit target at $16.25
10/15/15 planned exit for the October puts
10/14/15 if you own the options, prepare to exit tomorrow at the close
09/02/15 2nd position begins. VXX gapped down at $29.01
09/01/15 Double down on this trade with the VXX's spike to 6-month highs
08/25/15 trade begins. VXX gaps down at $21.82





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