Take the 1 Week Free Trial and Watch Me Make Money – This Rally Will Continue

October 9, 2015
Author: Peter Stolcers, Founder of OneOption

TAKE THE 1 WEEK FREE TRIAL AND WATCH ME MAKE MONEY Posted 11:30 AM ET - It's hard to believe that one week ago we were fighting off a dismal jobs report. I saw support when the closing low from August (SPY $187.20) was tested on Wednesday and that strength was confirmed Thursday when we got a round of soft news. In my comments Friday I mentioned that I would be buying if support at $189.50 held. It did and we are 120 S&P 500 points higher. Over the last couple of weeks I've told you not to listen to all of the "gloom and doomers". Do you remember these fears? Emerging markets are going to collapse because of low commodity prices. China's growth is grinding to a halt and credit concerns will be an issue. The Fed is going to hike rates and the economy is not strong enough. Boehner resigned and the government was shut down because the debt ceiling won't be raised. The talking heads on almost every financial network claimed that "this time was different" and we were not going to get a year-end rally. I told you that in a matter of weeks all of these worries would be in the rearview mirror and you would wonder how you could've missed such a great buying opportunity. I've been through this cycle for 25 years and I told you to be patient and to start getting long. We started off by selling out of the money put credit spreads on strong stocks a few weeks ago. We were able to distance ourselves from the action and take advantage of time decay. The market was making huge overnight moves and this was the only strategy that made sense. I told you that when the reversal started, the action would be fast and furious and you would not have time to execute these trades. As soon as the market started to rally last Friday, no one wanted to buy puts and the bids vaporized. As soon as I saw the bounce Friday I sold VXX at $25.35 in size. I still have the position and I will start buying it back next week. Asset Managers that delayed buying missed the move. The S&P 500 rallied 100 points in 24 hours. They were hoping for a retracement and they never got it. In my comments the last few days I've been telling you that they would get anxious and that the bid would strengthen into earnings season. Asset Managers do not want to miss a year-end rally. The FOMC minutes yesterday fueled a breakout above resistance at SPY $200. Now that is a support level we can lean on. A week ago I urged you not to short the jobs report. Anyone who did got the door slammed in their face. This is a double-edged sword that cuts deep. You take a beating on your short positions and in the process of exiting your losing trades, you miss getting long. This week I have been buying deep in the money calls were the deltas are high. I did not want to buy any time premium. This is a surrogate stock position and I can leverage my capital. This is been a relatively small portion of my overall trading. I have also been day trading stocks from the long side. I can take advantage of intraday 4:1 margin requirements and I believe I will be able to capture the rest of the move without taking any overnight risk. Day trading stocks is efficient because stocks are liquid and I am not buying volatility. During these rallies we often see the market open on the low and close on the high. I can reload daily. The market should be able to rally above SPY $202 next week. Once we breakout above that level we will run up to SPY $205. The headwinds will blow after that and we need to trade with caution. China will post its trade balance numbers next Tuesday and Intel/JP Morgan will post earnings. On Friday, China will post retail sales, industrial production and GDP. They claim that economic conditions have stabilized. My put credit spreads that I put on over the last few weeks are in great shape and I am buying them back for pennies. This is releasing capital and I am locking in profits. I am letting my calls run and I am day trading like a madman. If you want to make a lot of money, I urge you to take my one-week free trial. It won't cost you a dime and you can come in to the chat room and watch me make a killing every day. Stay long and take profits as the market grinds towards SPY $205. . . image

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