Option Investor
Newsletter

Daily Newsletter, Monday, 1/29/2018

Table of Contents

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

Market Wrap

Slow Start To A Big Week

by Thomas Hughes

Click here to email Thomas Hughes

Introduction

There's so much going on this week I don't know where to start; the FOMC tops the list but is by no means the only thing moving the markets. Along with the meeting is a round of important monthly macro data that happened to include the PCE price index this morning. Later in the week we'll get important reads on manufacturing, real estate and labor to include the ADP, Challenger and NFP reports. On top of that this is peak earnings. This week is the busiest week of the season, there are 125 S&P 500 companies reporting, and a make or break week for the market. Also on tap is the State of the Union Address which should be interesting if nothing else.

Asian indices began the week mixed. Chinese markets were down across the board while Japan closed with a negligible loss and others in the region posted small gains. Chinese markets were driven by a government sponsored op-ed stating black swan or gray rhino events were due this year; my take, if a black swan is something you can't predict what value does this statement have other than to spook or caution markets? European indices were also mixed but more flat than not as earnings, the FOMC and data come into focus. The EU is expecting a read on 4th quarter GDP along with other data.

Market Statistics

Futures trading was flat to down all morning, the down part taking dominance as we approached the opening bell. Trading was driven by earnings uncertainty, economic/FOMC anxiety, growing scandal related to sexual misconduct and interest rate angst. Interest rates have begun to move higher and that has the market spooked. Traders have begun to move en masse from bonds to stocks and that has, in the past, been a harbinger of doom. My take on that is that was then this is now. The SPX opened with a loss near -0.25% and extended to that to roughly -0.75% by mid day. The lunch time lows turned out to be intraday bottom resulting in a small bounce. By mid-afternoon the indices were very nearly back to the opening levels before selling took hold of the market again. The late day push lower left the indices trading at new lows for the day where they held into the close of the session.

Economic Calendar

The Economy

Today's report of primary importance and sole release of the day is Personal Income and Spending. Personal income increased by 0.4% and a tenth ahead of expectations while spending rose by 0.4% and missed by a tenth. The good news is that both figures are strong and point to expansion within the economy. The gains income were due to salaries and wages suggesting they will be long lasting. The all important PCE price index came in at 0.1% headline and 0.2% core, both as expected, with YOY gains of 1.7% and 1.5% respectively. While these numbers are not hot they do suggest the FOMC will stick to their time line with a chance of picking up the pace if inflation shows further signs of acceleration.


Moody's Survey of Business Confidence shows business sentiment is trending near multiyear highs. The latest read came in at 35.0, up from 34.3 but below the recent high of 38.2. Regardless the index is consistent with positive business conditions and forward outlook. Mr. Zandi says businesses are feeling good. The survey results show an economy growing above potential with few concerns. One is legal and regulatory issues but that is receding. Another is labor scarcity and cost and that one is getting worse.


With 24% of the S&P 500 reporting the earnings season is looking very good. I have to say that at this time there are many earnings fueled tailwinds driving the market and it doesn't look like they are going to run their course for at least another year and probably much longer. These include positive earnings outlook, earnings expansion within that outlook, improving expectations and, at least for now, businesses that are still beating despite increased analyst confidence.

So far 24% of the S&P 500 has reported with 76% beating EPS estimates and 81% beating revenue estimates. Both the EPS and revenue beat rates are above average, the revenue rate is at an all time high. The blended rate of growth has risen to 12% already and may continue higher. All 11 sectors are showing growth while 8 are outperforming expectations.


Looking forward growth is good. All four quarters of 2018 are expected to show double digit growth and those estimates have been rising. The first quarter is now expected to see 16% earnings growth as is the second. The third quarter is expected to see growth expand to 17.3% and then again in the fourth to 28%. Yes, 28%. The last time that happened the economy was rebounding from the Global Financial Crisis and hitting a peak, this time around it is growing and and growth is accelerating.


The Dollar Index

The dollar steadied a bit after last week's fall. The Dollar Index gained about 0.20% creating a small green bodied candle sitting on a support target. Support is currently near $89.00 and may hold provided the FOMC sticks to its guns. If they back off their stance the dollar could fall further. If they sound hawkish the dollar may be able to gain ground versus the basket of world currencies. The risk is that global growth is accelerating as well and that will continue to undermine dollar strength keeping the index range bound.


The Gold Index

Gold prices edged lower extending losses begun last week. The metal is moving down off of a long term peak and is indicative of resistance at the $1,350 level. Today's move was driven by strength in the dollar and may continue lower should the dollar begin to strengthen longer term. The indicators are both consistent with a peak and correction showing divergence and bearish crossovers. At this time spot prices are well above the short term moving average and within a trading range so a move down to the average is possible, near $1,320, with a chance of going lower.

The Gold Miners ETF GDX fell -2.75% on the fall in gold. The ETF broke through the $24 support target and is now resting on the short term moving average. Support is near the middle of the long term range and likely to be tested again. The indicators are mixed, consistent with range bound trading and a move lower within the range. A fall below the short term moving average would be bearish with downside target near $22.50 in the near term.


The Oil Index

Oil prices fell nearly a full percent in today's session. WTI was pressured lower on strengthening dollar and signs of rising output in the US. The number of rigs operating in the US/Canada region increased by 24 in the last month, up 228 in the last year, and suggest markets will remain well supplied despite the OPEC production cap. Today's move gives further indication that resistance exists above $66 but no signs of reversal have emerged yet. Contrarily, JP Morgan just raised their price target to $70.

The Oil Index fell -1.54% in response to the fall in oil prices. The index appears to be on the verge of correction and no surprise there, the prices is up substantially in the last few months. The indicators are consistent with a decline in prices, both showing divergences from recent highs and bearish crossovers. A fall from this level may find support at the short term moving average, about -3.5% from today's close, a move below that may go as low as 1,350 or 1,300.


In The News, Story Stocks and Earnings

Wynn resorts stock fell another -16% on growing scandal centered around CEO Steve Wynn. New allegations came out today expanding the scope of the abuse case which rocked the market last week. Simply speaking to the company and Mr. Wynn's ability to run it, most of Wall Street agrees the business is in peril without him. Today's move created another large red candle, broke below the short term moving average and looks like it will test $160 if not move lower.


Dominion Energy reported before the bell delivering mixed results. The company grew revenues by more than 4% over the prior year but fell short of estimates. EPS of $0.91 beat by $0.02. On an as-reported basis the bottom line nearly tripled on benefits from tax-reform. Forward guidance is in line with expectations helping the stock to inch up in early trading. Late in the day market angst took its toll, driving shares back to break even and below.


Lockheed Martin reported before the bell dropped an earnings bomb. The company reported revue grew more than 10% resulting in earnings of $4.23. EPS beat consensus estimates by more than $0.20 and last years results by more than a dollar. All segments save space produced double digit growth with strong outlook for 2018. Shares of the stock jumped 3.5% in the premarket session, opened with a gain near 2% and closed at that level after a volatile day of trading.


The Indices

Today's action was bearish at face value but not overly alarming when looking at the daily charts. All the major indices created red candles, some stronger than others, but none strong enough to indicate reversal or even correction with so much ahead of us this week. The S&P 500 made the biggest decline but only -0.67%. The broad market created a small bodied red candle that qualifies as an inside day but not one I would trade on. The indicators remain bullish and consistent with ongoing rally although they are showing some weakness in the near term. This could result in correction and a possible move down to the short term moving average but no guarantee there. Bottom line, the trend remains up with expected, possibly bullish, catalysts at hand.


The Dow Jones Industrial Average posted the 2nd largest decline, -0.66%. The blue chips created a small to medium sized red candle that is forming a dark cloud cover but not one that looks significantly different from any other red candle we've seen over the past few months. The index is in up trend and that has not changed. The indicators remain bullish but have begun to show peaks consistent with consolidation and/or correction. A move lower may be bearish but would likely find support at 26,000 or just below that at the short term moving average.


The NASDAQ Composite fell -0.52% creating a small red candle. Today's candle is to the side of Friday's and completely inside of it. The indicators are bullish but consistent with a consolidation and set up to fire trend following signals should the index move higher. A move higher would be bullish with upside targets near 7,750 and 8,000.


The Dow Jones Transportation Average posted the smallest decline in a light session of trading. The index closed with a loss of -0.10% creating a small doji candle. The index is bouncing up from the short term moving average in a trend following move but some resistance is still present. The indicators are still pointing lower following bearish crossovers so support may be tested again. A break below the moving average would be bearish with target near 10,500. A bounce would be trend following and bullish with target near 11,500.


I've been bullish a long time and, if my perspective is true, I will be bullish for a long time to come. That being said the market looks like it could correct right now. The problem is that we are at the start of a really big week for the market. Data and the FOMC are going to affect trading but what I am really looking to is the 125 S&P companies that are reporting earnings this week. If they produce stats like the first 24% did I don't see the market moving lower. I'm bullish, cautious, but bullish.

Until then, remember the trend!

Thomas Hughes


New Plays

Get Over It

by Jim Brown

Click here to email Jim Brown
Editor's Note

AT&T has changed their compensation plans for selling mobile phones and DirecTV. This caused sellers to take some unexpected losses. A 30% decline in revenue from AT&T sales caused Gamestop to disappoint on earnings. Investors should get over it.



NEW BULLISH Plays

GME - Gamestop - Company Profile

GameStop Corp. operates as an omnichannel video game retailer. It sells new and pre-owned video game hardware; video game software; pre-owned and value video game products; video game accessories, such as controllers, gaming headsets, virtual reality products, memory cards, and other add-ons; and digital products, including downloadable content, network points cards, prepaid digital and subscription cards, and digitally downloadable software. The company also sells mobile and consumer electronics, including wireless products and services, and accessories, as well as new and pre-owned smart phones; personal computer (PC) entertainment software in various genres, including sports, action, strategy, adventure/role playing, and simulation; and strategy guides, magazines, and interactive game figures. In addition, it offers collectibles that include licensed merchandise related to the video game, television, and movie industries, as well as pop culture themes; and operates electronic commerce Websites under the GameStop, EB Games, Micromania, and ThinkGeek brand names. Further, the company operates kongregate.com, a browser-based game site; Game Informer magazine, a print and digital video game publication; iOS and Android mobile applications; Simply Mac, a certified Apple consumer electronic products reseller, as well as offers certified training, warranty, and repair services; and Spring Mobile, an authorized AT&T reseller operating AT&T branded wireless retail stores, as well as pre-paid wireless stores under the Cricket Wireless name that offers prepaid services, wireless devices, and accessories. As of January 28, 2017, it operated approximately 7,535 stores in the United States, Australia, Canada, and Europe. GameStop Corp. primarily offers its products through stores under the GameStop, EB Games, and Micromania names. The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1994 and is based in Grapevine, Texas. Company description from FinViz.com.

Expected earnings March 5th.

When Gamestop reported Q4 earnings, sames store sales rose 11.8%, hardware sales rose 39.4% and software sales rose 7.3%. The only gaming hit was an 8.1% decline in sales of preowned software. That was due to a surplus new games hitting the market in the quarter making older titles less desirable.

However, the killer was a 20% decline in revenue from AT&T for selling their mobile phones and DirecTV service. It was not that they sold dramatically fewer units but AT&T slashed their compensation to retailers. For instance if the company got $50 in Q3 for selling a phone and only got $40 in Q4 for selling the same phone, the revenue shortfall is not the fault of the seller but the manufacturer.

Gamestop is currently selling for a ridiculous PE of 5.5 with an 8.7% dividend. Game sales are doing fine and they have 7,500 stores. This looks like a buying opportunity. If the market was to roll over, GME would be seen as a safe value play.

Buy GME shares, currently $17.15, initial stop loss $16.25.
Alternate position: Buy April $18 call, currently 86 cents. No stop loss.



NEW BEARISH Plays

No New Bearish Plays



In Play Updates and Reviews

Minor Profit Taking

by Jim Brown

Click here to email Jim Brown

Editors Note:

Monday was a calm day of orderly selling as investors took some chips off the table. The selling action did increase just before the close but it was still orderly. The Russell fell back to support at 1,600 and closed just under that level. The Dow declined to 26,450 but could easily sink to 26,000 without damaging the uptrend. The Nasdaq only gave back about half of Friday's gains and we would take that kind of retracement every week if possible. Only five big cap tech stocks were positive.





Current Portfolio


Stop Loss Updates

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


Profit Targets

Check the graphic below for any profit stops in green. We need to always be prepared for a profit exit at resistance.





Current Position Changes


VIPS - Vipshop Holdings
The long position was entered at the open.



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BULLISH Play Updates

BOTZ - Global X Robotics AI - Company Profile

Comments:

Since this is a long-term slow moving ETF position, there will not be daily commentary.

Original Trade Description: October 4th.

The investment seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Robotics & Artificial Intelligence Thematic Index. The fund invests at least 80% of its total assets in the securities of the underlying index. The underlying index is designed to provide exposure to exchange-listed companies in developed markets that are involved in the development of robotics and/or artificial intelligence as defined by Indxx, the provider of the underlying index. The fund is non-diversified. Company description from FinViz.com.

Robots of every description are taking over the manufacturing sector, service sector, etc. Drones are automated. Autos are becoming autonomous.

Even more important to this ETF is the sudden arrival of Artificial Intelligence or AI. That is the buzzword for everything. Everybody is trying to get into the AI business.

This ETF took off last January and while there have been several mild hiccups along the way, the chart is nearly vertical as investors become aware of it.

I am going to lag back on the stop loss because this could be a long-term position.

Update 10/26: Shares of BOTZ fell 50 cents for the biggest one-day drop since the ETF began in September 2016. There was no news but volume of 4.16 million shares was the largest ever and well over the 964,000 historical average.

Position 10/5/17:

Long BOTZ shares @ $22.10, see portfolio graphic for stop loss.
Alternate position: Long Mar $23 call @ 80 cents, see portfolio graphic for stop loss.



IMMU - Immunomedics Inc - Company Profile

Comments:

No specific news. Only a minor decline in a weak market.

Original Trade Description: December 23rd.

Immunomedics, Inc., a clinical-stage biopharmaceutical company, focuses on the development of monoclonal antibody-based products for the targeted treatment of cancer, autoimmune disorders, and other diseases. The company engages in developing antibody-drug conjugate (ADC) products comprising IMMU-132, an ADC that contains SN-38, which is in Phase II trials used for the treatment of patients with metastatic triple-negative breast cancer, and small-cell and non-small-cell lung cancers; IMMU-130, an anti-CEACAN5-SN-38 ADC that is in Phase II trials for the treatment of solid tumors and metastatic colorectal cancer; and IMMU-140 that targets HLA-DR for the potential treatment of liquid cancers. It also develops products for the treatment of cancer and autoimmune diseases, including epratuzumab, anti-CD22 antibody; veltuzumab, anti-CD20 antibody; milatuzumab, anti-CD74 antibody; and IMMU-114, a humanized anti-HLA-DR antibody. The company also provides LeukoScan, a diagnostic imaging product to determine the location and extent of infection/inflammation in bone. In addition, it offers other product candidates for the treatment of solid tumors and hematologic malignancies, as well as other diseases, which are in various stages of clinical and pre-clinical development. The company has a research collaboration with The Bayer Group to study epratuzumab as a thorium-227-labeled antibody. Immunomedics, Inc. was founded in 1982 and is headquartered in Morris Plains, New Jersey. Company description from FinViz.com.

Immunomedics recently announced a blinded trial on breast cancer drug sacituzumab govitecan showed positive results. The drug is an anti-TROP-2 antibody that can target multiple tumor types including breast cancer, lung cancer and colorectal cancers. This would be a holy grail of cancer treatment if the drug continues to post solid results. The drug is being tested to treat triple negative breast cancer, a tough-to-treat indication with limited treatment options. These cases represent 15% of the 246,660 new cases of breast cancer reported each year resulting in 40,450 deaths per year. In the recent trial the "objective response rate" or ORR was 31% or nearly double the historical rate for the standard treatment of these patients. The company plans to file for an accelerated FDA approval in early 2018. An independent study of this drug by an outside firm estimated it could produce $3 billion in annual sales by 2025.

Obviously, there is no guarantee the drug will be approved or be successful in the real world but the outlook is promising and it is lifting the stock price. Shares broke out to a new 15-year high on Friday and could continue to make new highs as long as the research on this drug and others continues to be positive. Seattle Genetics (SGEN) owns 7.3% of the company and executed warrants to acquire 8.6 million shares on December 5th for $42.4 million. They obviously believe the drug has potential.

Hopefully the potential for a blockbuster drug will insulate us from any market negativity in January.

Update 1/8/18: Royalty Pharma bought $75 million of IMMU shares at $17.15 per share, 15% over the current price. They also paid $175 million for the rights to market Sacituzumab Govitecan (IMMU-132) on a global basis. They will pay a royalty of 4.15% on a step down basis until sales reach $6 billion annually then the rate will be 1.75%. The $250 million in cash will allow IMMU to fund its next phase of growth with expenses covered well into 2020. Shares declined slightly since the stock sale added to the shares outstanding.

Position 12/26/17:

Long IMMU shares @ $14.69, see portfolio graphic for stop loss.
Alternate position: Long Feb $16 call @ $1.15, see portfolio graphic for stop loss.



TTMI - TTM Technologies - Company Profile

Comments:

No specific news. Minor gain in a weak market. Our stop loss is just under Thursday's low.

Original Trade Description: January 20th.

TTM Technologies, Inc., together with its subsidiaries, manufactures printed circuit boards (PCBs) worldwide. It provides a range of PCBs and electro-mechanical solutions, including conventional PCBs, high density interconnect PCBs, flexible PCBs, rigid-flex PCBs, custom assemblies and system integration products, and IC substrates. It also produces test specialized circuits that are used in radio-frequency or microwave emission and collection applications; printed circuits with heavy copper cores, and embedded and press-fit coins; PCBs with electrically passive heat sinks; and PCBs with electrically active thermal cores. In addition, the company offers various services, including design for manufacturability, PCB layout design, simulation and testing, and quick turnaround services. The company's customers include original equipment manufacturers and electronic manufacturing services companies that primarily serve the networking/communications, cellular phone, computing, aerospace and defense, and medical/industrial/instrumentation end markets of the electronics industry; and the U.S. government. TTM Technologies, Inc. was founded in 1978 and is headquartered in Costa Mesa, California. Company description from FinViz.com.

TTMI is an underappreciated chip stock. Earnings are rising and they are growing by acquisition. For Q3 they reported earnings of 32 cents on revenue of $667 million. For Q4 they guided for earnings of 49-55 cents on revenue of $700-$750 million. This was the fourth consecutuve quarter of organic growth, revenues and earnings that exceeded guidance.

On December 3rd they announced a deal to acquire radar components maker Anaren for $775 million in case from Veritas Capital. Anaren produces microwave components for wireless, space and defense electronics providers and counts Raytheon Co Lockheed Martin Corp, and Northrop Grumman Corp as customers. TTMI said the deal would immediately reduce costs and be accretive to earnings.

Earnings expected on Feb 7th.

Shares are about to break out to a six month high over $17.50 ahead of earnings. The short-term trend over the last month has been steadily higher. They have long-term resistance at $19.50 and a break over that level would be a new high and cause significant buying.

I do not usually recommend stocks just before earnings. I am suggesting we play the stock position and exit before the Feb 7th event. I am recommending we hold the very inexpensive option over the earnings in hopes of a real breakout to new highs. The stock closed at $17.59 so the $17.50 strike is expensive and risky. The next strike is $20, well OTM but the price is only 35 cents. It is a cheap bet on a positive earnings breakout.

Position 1/22:
Long TTMI shares @ $17.48, see portfolio graphic for stop loss.

Alternate position: Long March $20 call @ 34 cents, see portfolio graphic for stop loss.



VIPS - Vipshop - Company Profile

Comments:

No specific news. Only a minor decline in a weak market.

Original Trade Description: January 27th.

Vipshop Holdings Limited, through its subsidiaries, operates as an online discount retailer for various brands in the People's Republic of China. It offers a range of branded products, including women's apparel, such as casual wear, jeans, dresses, outerwear, swimsuits, lingerie, pajamas, and maternity clothes; men's apparel comprising casual and smart-casual T-shirts, polo shirts, jackets, pants, and underwear; women and men shoes for casual and formal occasions; and accessories consisting of belts, fashionable jewelry, watches, and glasses for women and men. The company also provides handbags, such as purses, satchels, duffel bags, and wallets; apparel, gear and accessories, furnishings and decor, toys, and games for boys, girls, infants, and toddlers of all age groups; sports apparel, and sports gear, and footwear for tennis, badminton, soccer, and swimming; and skin care and cosmetic products, including cleansers, lotions, face and body creams, face masks, sunscreen, foundations, lipsticks, eye shadows, and nail polish. In addition, it offers home furnishing products comprising bedding and bath products, home decors, and dining and tabletop items; small household appliances; designer apparel, footwear and accessories; and snacks, health supplements, and occasion-based gifts, such as chocolates, moon-cakes, and tea. Further, the company provides consumer financing, supply chain financing, and wealth management services. The company provides its branded products through its vipshop.com, vip.com, and lefeng.com Websites, as well as through its cellular phone application. Vipshop Holdings Limited was founded in 2008 and is headquartered in Guangzhou, the People's Republic of China. Company description from FinViz.com.

VIPS has about a 6% market share in e-commerce apparel in China. Currently there is a battle in progress for market share among numerous major players including Alibaba and their various websites. They all exist in come part under the Alibaba umbrella.

Tencent (TCEHY) and JD.com (HD) are two of the major online players. They just announced an $853 million stake in VIPS. Tencent bought a 7% stake for $604 million and JD.com put up another $259 million to increase their stake from 2.5% to 5.5%. FYI Tencent owns a 21% stake and Walmart owns a 10% stake in JD.com. These are major players who believe VIPS is going to grow significantly.

VIPS is the 4th largest business to consumer online retailer in China behind Alibaba's Tmall, JD.com and Suning, in that order. Over the last 12 months VIPS increased its active customers by 22% to 6.5 million. The company is expanding out of apparel and accessories and into things like pharmaceuticals. On Alibaba's Singles Day, VIPS handled more than 10 million orders. Analysts expect VIPS revenue to grow 33% in 2018 and earnings to grow 43%.

Why is the investment by JD.com and Tencent so critical? Tencent has 980 million monthly active users on WeChat and JD.com has 266.3 million active customers. They are going to make these customers available to VIPS. Remember, VIPS only has 6.5 million customers but they have the products that Tencent does not have. This means VIPS sales are going to explode.

VIPS has earnings on Feb 19th. I am recommending we buy a cheap call and hold over the earnings event because good things are likely to come out of the report.

No stock, just buy the call. The stock is rising quickly but it could reverse just as easily.

Position 1/29/18:
Long Mar $19 call @ $1.15, see portfolio graphic for stop loss.




BEARISH Play Updates

VXX - Volatility Index Futures - ETF Description

Comments:

Since this is a long-term slow moving ETF position, there will not be daily commentary.

Original Trade Description: September 18th.

The VXX is a short-term volatility ETF based on the VIX futures. As a futures product it has the rollover curse. Every time they roll to a new futures contract, they have to pay a premium and that lowers the price of the ETF. It is a flawed product with a perpetual decline built in from the monthly roll over in the futures contracts.

As evidence of this flaw, they have now done four 1:4 reverse stock splits. The last five reverse splits occurred at $13.11 (11/2010), $8.77 (10/2012), $12.84 (11/2013), $9.52 (8/8/16), $12.77 (8/22/17). The prospectus says it can reverse split anytime it trades under $25 for a prolonged period and the splits will always be 1:4.

We know from experience that the VXX always declines. The last two times we shorted this ETF we had a $7.23 and $5.98 gain.

Unfortunately, put options are expensive with a volatility instrument at this price level. The only recommendation is to short the ETF and forget it. If we do get a prolonged rally into year-end we could see a sharp decline in the VXX over the next 2-3 months. This will be a long-term position. This is not a 2-3 week play. I can guarantee you, if history holds, we can play this until it splits 1:4 again at $10. Once we are in the position and profitable I will put a trailing stop loss on it. We will take profits and then look for a bounce to get back in.

The VXX is hard to short. Shortsqueeze.com says there are 19.9 million shares short out of 26.7 million shares outstanding. The shares are out there and being traded because the volume on Monday was 29.6 million. You have to tell your broker you really want to short it and make them find the shares. Sometimes it takes days or even a week before your broker will find you the shares. Trust me, be persistent and it will be worth the effort.

I had held off after the 1:4 reverse split because the options were expensive and I was expecting volatility in September from the budget battle and debt ceiling hurdle. With those issues pushed out into December, the volatility is dropping like the proverbial rock. Several readers have already emailed me asking when I was going to put this position back in the portfolio.

Position 9/19/17:

Short VXX shares @ $40.95, see portfolio graphic for stop loss.





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