Tutorials

Once again, we laid in an inventory of potential trading opportunities, most of them mechanical, that could trigger in the days ahead. The mechanical set-up continues to be the simplest and most reliable method we employ to get into – and out of – profitable trades. The nuances that separate good opportunities from bad can be subtle, but distinguishing between them continues to be a point of emphasis for these sessions. The final minutes feature a completely ‘forced’ trade in the E-Mini S&Ps. If you are skeptical that it’s possible to make small profits very consistently with just a little extra work, check it out.

Apple’s bear rally is beginning to stink. So how do we capitalize on this when the stock sputters out and the inevitable wicked downturn commences? A enticing strategy is the main subject of this lesson, which is mostly devoted to the crafting of a calendar spread that would give us a cheap, low-risk bet. In fact, the position could conceivably wind up costing us nothing, and even if we are wrong, it will not cost us much. Check it out! (Please note that I inadvertently switched from puts to calls when we priced the opportunity. This made no difference with respect to how the position should be built, and I corrected the error before the session ended. Numerous subscribers reported doing the spread after the session ended, and it will be available in any case in the days ahead.

Forcing a trade was bound to take more effort than usual, since this session was held an hour before a (dovish) FOMC announcement. We looked at the E-Mini S&Ps, Gold and Crude Oil and found things to do, including two trades that triggered and went on to produce profits. The mechanical trade remains the weapon of choice, especially when we are at war with tedium. Check it out if you want to add some useful tools to your arsenal.

We came away from this session with several trade set-ups to ponder, although none of them triggered during the hour. Once again, a strategy to leverage a rally target using call calendar spreads was the most promising of the bunch. It’s possible to calculate the maximum profit on the spread without using software or a Black-Scholes model. A little simple arithmetic told us that the spread we would attempt to buy for 0.10 or so had a chance of widening to as much as 1.20. Not bad odds.

This session offers a smorgasbord of tactics, including an option bet that required some calculations. Although we found no good excuse to pull the trigger, there were several set-ups taking shape that could prove valuable. I’ll note that the most promising of them – bottom-fishing at a midpoint support in the E-Mini S&Ps – stopped out the trade for a small loss later in the day. As you will see, however, the outcome did not catch us by surprise.

This session provides an exhaustively detailed look at an option strategy that can be used to leverage a $20 rally in Boeing to a high-probability target. We pondered calendar-spreading the 455 strike, a strategy that would risk perhaps $50 per spread and pay off at as much as nine-to-one. All of the necessary calculations are on view here, including a relatively simple way to determine how much to pay for the spread, and what it would be worth if the target is achieved. As of the close, the strategy was still viable.

With a Fed announcement just hours away, stocks were comatose. Even so, as you will see, there’s always something to do. Two closely rationalized trades are on view here, including an E-Mini S&P entry that could have produced a $250 profit in mere minutes. Using the rating system taught in the Hidden Pivot Course, we pondered an opportunity that rated only a ‘6.5’ on a day when we’d determined to initiate trades rated only ‘8’ or better. If you haven’t had much practice with the rating system, this lesson will put you on-track.

We’re always hellbent on forcing trades during these sessions, but on some days the trades require rather more effort than others. We make it happen nonetheless, if in a small way, with the E-Mini S&Ps and a few ‘lunatic’ stocks. There’s also a possible put set-up in DIA puts to ponder for later in the day. In each instance, the psychology behind the trade is made explicit, since winning trades invariably originate outside of one’s comfort zone.

There are two things to note here: a possible buying opportunity in VXXB that could materialize within the next 4-6 days, and a ‘camouflage’ short that we forced in the E-Mini S&Ps. Regarding the latter, we resolved to initiate a trade come hell or high water. Conditions were as poor as they get, since the broad averages and most stocks were trendless and oscillating within a very tight range range. The rationale for the trade was rules-based, as you will see, but it took horse-sense to formulate a plan. Just after the session ended, ES dropped to deliver a nice profit at the higher of two targets we’d calculated.