Wheeee – that was fun!
Yesterday, in our Live Trading Webinar, we picked up two shorts on Gasoline Futures (/RB) after reading the Full Petroleum Status Report (released at 1pm) and deciding the run-up to $2.06 was miguided. We rode out a bit of pain to $2.07 but decided to stick with it into the close and, this morning, we were rewarded with a lovely drop to $2.04, where we are taking the very nice $2,196.60 profitand running. Congratulations to all who played along at home.
Once again, this is the key to Fundamental Investing, we read the news and reports, check out the data and then make our trades based on how that information is likely to affect the stocks and commodities we are trading. It's much more fun, and satisfying, than starting at squiggly lines on a chart all day.
This morning there's pressure on commodities and indexes as well, with Silver (/SI) plunging all the way back to $15 and Gold (/YG) to $1,300 as the Dollar pops back up – something else we were expecting and today's excuse is a Brexit extension that has weakened the Euro and the Pound but also the relatively hawkishness of our Fed compared to other Central Banksters is a factor that continues to keep the Dollar strong.
We love playing /SI long at the $15 line, it's great for a bounce and an easy line to place tight stops below – especially when the only reason Silver is down is because the Dollar is up – that's a dumb reason for people to bail out of their positions but /SI is a painful contract, at $50 per penny, per contract so gains, and losses, come very quickly. $14.90 has been the low for the year and the $15 line has held up well so we take these opportunities whenever they come along.
Also in yesterday's webinar, we reviewed our Member Portfolios, which are up nicely for the month and we discussed the importance of using some of those unrealized profits (25-33%) to shore up our hedges and lock in those gains – because they can reverse in a snap.
Cashing out is not really an option as FOMO (Fear of Missing Out) means we don't want to miss a rally that gave us 25-30% gains in the Options Opportunity Portfolio, the Money Talk Portfolio and the Long-Term Portfolio – who wants to miss that? We don't know when the party is going to stop (we fear it will be in a week or two on earnings) but we'd really like to stay until the last keg is tapped.
It is very possible, however, that we will give up a whole month's worth of gains before we're able to get out of our positions if there's a major sell-off so don't get too attached to those paper profits – it's very much "easy come, easy go" in this kind of market so, next week, we will once again be looking to purge some of our big winners – just in case.