This Market is Perfect for This Kind of Trade
Hey everyone, this is John, and welcome to the free video. What a crazy day! Let's take a look at AMZN. We've actually been trading AMZN pretty good all week. Today, unfortunately, we were flat on AMZN. "Unfortunately because, well--You can either be long, short, or flat. I would have loved to have been short AMZN, but I was flat AMZN. So, didn't make any money. Didn't lose any money.
This year, we essentially played AMZN with some directional puts to the downside. Made some money. Played it to the upside, made some money. And then yesterday, took profits in it, because it gapped up, and I'm very nervous about being long, and today it just puked. It would have been great to have some puts on it, but flat is a position. Save your cash for another day.
So what happened today? Let's take a look at the NASDAQ futures. First of all, from a weekly perspective, you can't really tell that there's a futile attempt at a bounce. It's important to keep in mind: On a daily chart, once a market closes below its 89 period moving average two days in a row, and all the other moving averages are on top of it, that is a potential multi-month trend change. i.e.--any rallies back to the 89 are shortable.
The second thing to keep in mind: After this HUGE move, like, 600 points down we only managed to rally, like, 2 days? I mean, that's not even a flag. That's a foot. And then we roll back over? Very, very bearish. When it says "violent?"--okay, let's bring up a 15 minute chart, and we can see that essentially overnight, we rallied, we opened up like 30 points, 40 points, and then we just kind of puked.
Overall, the plan today was: Okay, we gapped up, let's take profits on longs--so just wait. You don't want to buy anything, but then, you don't want to short anything. And then I went to go to lunch. And while I was at lunch, a particular thing happened. The ticks did this, and at about that time, the NASDAQ fell 100 points, and I completely missed that. There's a great trade when that happens. That's when you get the first +600 tick reading. When you get a series: -1000, -1000, -1200, -1200 ... and then you hit +600? You always short that.
So we did that. Obviously, you can buy QQQ puts, but that's kind of something for the NASDAQ futures. So we're watching it, it's going, it's going... we get the +600 tick reading. You can wait for the loss of momentum to double-check, you get short, you place your stop. In this case, we rode it all the way back down.
That was in the beginning of the year. We set up four accounts: a $5k account, which is options, a $15k account, which is just futures, and a $45k account and a $185k account So the $15k account, we shorted the NASDAQ, and it ended up being the best performing account of the day. That was fantastic. An intraday move like that is actually very easy to do in futures. And it's a little more difficult to do with options. I love trading options, but if you're looking for shorter term directional stuff, it's a little trickier. NASDAQ futures or any type of futures are really good for directional moves like that.
Of course, if you had a bunch of bullish positions on, like, say, option put credit spreads that are going to be difficult to manage when the market's rolling over, great! You can short NASDAQ futures and just hedge yourself. Lock in your net liquidating value so you don't have to freak out.
A couple things here, real quick, to mention. Some pretty awesome stuff is coming up. I have not done a futures class in two years. A lot of people here are interested in futures, or you're just looking for more interesting setups. Basic Strategies: 5 hours. John F. Carter, Tony LaPorta, and Neil Yeager. If you're a newbie, you'll learn everything you need to know about futures. Basics + Trading + Hedging. Then we'll each show you our favorite setup. Then we'll talk about things like rollover gaps and different strategies that you can do with futures. $497 class. The goal: By trading one contract on a couple of these setups, you can make this back. I'm just excited because I've not done a futures class for a long time, and Neil and Tony will be joining me on this. The markets the way they are ... you're at a disadvantage if you don't understand futures. Even if you don't trade them, you'll want to understand how they work how they drive market movement, and how the correlations work. That's all futures-based. From there, we're going to do live trading. This is going to be different from anything you've ever seen. Obviously, it's futures, but a lot of this is driven by internals. We'll be reading the ticks, reading the vol spread, reading the VIX, reading the put/call ratio, and timing shorter term trades in the futures with this. Also, we'll study correlations. And all three of us will be live trading, on the microphone at the same time, discussing live trades. This is a must-attend class. The Saturday class is January 23, 2016. Live trading is January 26, 27, 28, and includes the Saturday class.
Last but not least: We have a few spots left for our Austin live event. How this works: Small group, limited to 50 people. Yes, it's a bit of a hefty price-tag, $4,997. A very good investment into your future self, though. It includes these. Since it's in Austin, our entire team is going to be there. You just walk away from your busy life, and focus on trading. You can have insights in that type of environment that normally take 6 months. Sunday, we'll talk about strategy for options and futures. Heavy emphasis on live trading, Monday and Tuesday. I'll be walking around, looking over your shoulder, you can ask me questions I'll bring some of you up on stage. It's a great time.
First special announcement: For those who don't know, Mark Douglas sadly passed away in August. He was a mentor of mine, I love his book "Trading in the Zone." I was actually doing coaching with him back in July, His widow, Paula Webb, has her own series of books that focus on mindset and money, and how people's brains relate to money. I've reviewed her work and asked her to come talk to our group. So she'll be there.
The other special guest: A gentleman named Sean Stephenson. I saw him recently speak at an event where Tony Robbins shared the stage. Sean blew Tony away. You can see, big audience. He's agreed to speak to our small group. When he was born, the doctor told his mother, "I'm sorry, your son only has a couple of weeks to live." Today, Sean is in his thirties, and he's proud to say that he outlived his doctor. His dad used to be a day trader, so he understands traders. He has learned some things about life-- about a person's attitude towards whatever they're doing. I found him very inspiring enlightening, and it helped me tremendously in terms of trading. So, he is going to be there, too. Our live events are very limited. They're maxed out at 50 people. We've got a few spots left. If you're interested, dive in and take your trading to the next level.
You all have a great rest of the night. We'll see you at the next update.