Just a Little More?
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Just a Little More?

John F. Carter - February 17, 2016

Everybody, this is John. Welcome to the free video. So we got the pop over the long weekend, and the question is, how long does this last? I mean, this is probably one of the most un-believed bounces of all time. Like, nobody thinks this is "quote unquote" a bottom and we go to new highs, and I have to admit, I am not in that camp either, but I'm also a contrarian to the point of, if everybody thinks that, then we need to rip some heads off. I do think we can at least get to the tree line. 102 ish. From there it could get interesting. So let's take a look at positions.

So, one easy trade that we did on this today was that we bought some $98 calls, three days out on the QQQ, and then went ahead and sold, at the time, the at the money put credit spread, and at this point we are up $315 bucks. Actually, in terms of exiting this trade, we're looking at $102.50 on the QQQ before we roll back over. I'm actually just looking for this to get up to about $100. I'm willing to sell these at $280. So they'll price that out. That would take us to about $175, right around there. I'm not even looking for the max target on that.

Now, in terms of trades that we held over the long weekend: Amazon. We just had a put credit spread on that. Pretty close. We sold it for $4.33. Right now, we could buy it back for $1.38. At $5.21 it's still within the expected move, and of course we've got earnings on Priceline tomorrow. So I did want to give it a little bit more time on that. Might be pushing my luck. The other one we held was WYNN. This is one that we set up the 6863 put credit spread on Friday with the idea of getting some weekend decay. We were paid handsomely.

For those who were smart, you probably bought it back at $0.20 today. $0.25. I want to give it another day and see if I can buy back the short side for a nickel. I admit that that's a little bit on the greedy side, but the reason I'm giving it a little bit more time is that the expected move is $4, and we are above the expected move on the spread. I will tend to give these a little bit more room once they go beyond the expected move, but I'm just saying that the smart move is to buy it back when you get to 80% of max profit. That's just, I just like to throw it out there. That's what I'm doing. The smart move is to have already bought it back and that's the reason I'm giving it a little bit more room.

And then another trade we did here was a diagonal on the SPYders and a covered call. The reason I did the covered call was that somebody just asked, "how do you do that?" I was like, Okay. So, the covered call, we bought a hundred of these at 189-0-something. We're up a little bit there, and at the same time, sold the 192 call against it, with the idea that that could possibly expire this week. Close out both at a profit. And then we also did a diagonal. We bought the 187 call with 10 days out, so in the money 10 days out, with the idea that the SPYders can continue to rally just a little bit. But then we sold the 191 call--it expires this week--to see if we can bring that premium in. Okay?

So the interesting thing that I'm looking at here on the SPYders is that we are pushing up of course into this fire line, which is very powerful, but we also have a squeeze. If the squeeze does trigger long, we could explode through there, and that is what has me intrigued. The markets are an equal opportunity dream killer, and right now the shorts are bragging about all the money that they've made, and it makes sense that they get their heads ripped off, go back to negative, and then and only then will the markets roll over. Keep in mind, the market is an equal opportunity dream killer, and right now it's the shorts that are in the cross-hairs.

So, one question I've been asked a lot is, literally, how do we navigate these markets? They're so volatile. And the best way to be able to navigate markets like this is to understand correlations. And the best person who understands correlations in terms of currencies and things like that is Raghee Horner. So we are setting up a class with her.
Strategy class Thursday, Feb 18, 6 pm - 9 pm Central. Live trading on Friday, February 19, essentially during the entire trading day.

So, simple rules and strategies for thriving in the current conditions. She loves these kind of markets. These are the topics that she'll be covering. You've got using fundamentals and technicals to find opportunity amidst confusion and uncertainty. There's certainly a lot of that. How to day trade markets and also set up bigger trades. The two simple indicators that she uses to define trending and non-trending markets, as well as the specific setups and mindset to avoid the common account killers and volatile conditions using her I.C.E. system to identify opportunities in any market and time frame, and the best types of chopped trade, and what chop can tell you about the markets.

Her three hour strategy class is just $197. If you would like to do the live trading, her strategy class plus the live trading, this is $297. That includes that. This will be incredibly valuable, especially for what's going on in the markets right now, to kind of get you up to speed on all the stuff. Hope it helps! Have a great night, and we'll see at the next update.