What Just Happened Last Week?
An interesting email I got from a subscriber… “Wednesday, December 18, SPY tanked 23 points and Hugh made 116% on calls in less than an hour just two days later. Pray tell Hugh, what’s your secret?”
Without giving away all my confidentialities here (I’d have to kill you if I did that), the following is how I felt 116% confident in my trade, which, by the way, involved real money.
- SPDR S&P 500 ETF Trust (NYSEARCA: SPY) dropped on a high-impact news item, that being Fed Chair Powell’s comments about upcoming interest rate cuts for next year.
- The following day, this stock tried to rise but felt additional downward pressure as a spending bill needed to be passed by the Senate to avert a financial disaster.
- The key element: having been down this rabbit hole too many times before, I knew that some iteration of the bill will be signed soon and that the impasse would pass, lest the government shut down at midnight that night.
- I also knew that the markets can handle good news and bad news; what they do not handle well is uncertainty. Once the budget anxiety was removed, SPY was poised to rise, and rise it would with about 20 points ahead of it to a recent major resistance.
- I then loaded up on cheap, out-of-the-money call options for $0.44 with a week to expiration and ran it up the flagpole with a stop-loss that took me out for $0.95 in less than an hour. In the end, those calls peaked at the top shelf where momma hides her cookies, hitting a high of $1.84 at 12:28 p.m.
The concepts are actually quite simple. Strategize against what others are doing. Where traders fear, we gear up for profits. Last week, President-elect Trump was at odds with de-facto co-President Musk — good news as we know these two gentlemen are known to get things done.
As soon as the documents were signed, SPY shot up. Mega.
How exactly did I decide my trades? That, fellow trader, is a loaded question which I cannot adequately answer in my limited space in this article. However, note that there was nothing unusual about my entry, although I did use a trailing stop as my exit, which I normally do not use for my scalps.
What I do suggest is that we have a very high rate of success, and that means that you should too, if you are part of our Trading Room. It is at these regular morning sessions where we discuss our high-probability trades. We give you our all, Ahren and myself. Sometimes people question why we teach and not simply trade. The short answer is, “Don’t ask why, just be thankful we do!”
The long answer is that we enjoy teaching, as it keeps us sharp. And we derive great satisfaction in watching others do well. What happened last week is not such a “once in a generation” rarity. In fact, events unfold quite often where we can see past the immediate issue that hamstrings other traders. We patiently wait and strike when it is time.
You hear me talk frequently about our internationally highly acclaimed Trading Room. Ahren and I have a combined 42+ years of market experience. We have seen all the ups and downs the market can throw at us. By now, we figured out what works in both trading and training. Your objective should be to take advantage of our skills and apply them to your own trading.
You don’t need to be an expert trader to be in our Trading Room. If you are familiar with calls and puts, you belong with us, daily. Click here for details on our Trading Room.
If you are not able to join us in those critical morning hours, we have other services that provide entry signals.
The DayTradeSPY Signal is one very popular service that is texted to your cell phone. When the moment arrives, buy it right then for a high probability 5% gain. Click here for details.
Ready to buy at the opening bell? Our Pick of the Day sends a particular option of interest to your Inbox at around 9:15 am, ET.
Not know where to start? Check out our Sunday Night Introductory Webinar at 8 p.m., ET. Click here for details.
Now here’s a great tip: that federal budget I talked about earlier? It comes up again next March. Will you be ready?
