Issue #204
Dear Member,
Per yesterday’s issue #203, you should have easily been able to sell the first half of your tranche in PowerShares Ultra Bloomberg Crude Oil ETF (UCO) for a sweet gain of roughly 21.25 percent.
Then, oil sold off, triggering my new recommended stop for the second half of the position at $7.61.
End result: You should now be out of your entire position in UCO, with a gain of roughly 18.52 percent. If not out, for whatever reason, exit your position as soon as possible.
I believe the oil bounce is over. I will be soon looking for you to take a bearish position on black gold.
Meanwhile, gold itself is acting miserably. I need to see a bit more action to confirm your next trade there. Ditto for silver.
Continue to hold ProShares UltraShort Dow30 ETF (DXD), with a good-till-cancelled protective sell stop at $19.25 and your July put options on PowerShares DB Agriculture Fund ETF.
Now, for my next recommendation. As many of you know from my Real Wealth Report, I have been resoundingly bullish on China. One of the only bulls out there.
And China’s stock markets have been on a tear, with the Shanghai A shares up over 23.68 percent year-to-date, on top of a 54.24 percent gain for 2014.
Now, everyone is hopping on board, recognizing just how healthy China’s economy is.
Problem is, they are buying into China’s stock markets at precisely the wrong time. The Shanghai market has reached very stiff resistance, and a sharp pullback to correct recent gains is likely.
I therefore recommend the following: Buying put options on the iShares China Large-Cap ETF, symbol FXI.
More specifically, I recommend the May 2015 put options on FXI with a strike price of 49.00, symbol FXI150515P00049000.
These put options closed at a price of $1.70 yesterday, or $170 per put option.
With FXI currently trading at $49.22, these puts are essentially at the money. If I’m correct that the Shanghai market is repelled by resistance and begins to pullback, these puts will offer you some very nice profit potential, and with strictly limited risk.
Here is a chart of the Shanghai market. As you can clearly see, the market’s recent rocket rise higher is unsustainable in the short-term, and now hitting important resistance.
To purchase these put options …
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For each $25,000 you are trading in this service: BUY 8 May 2015 FXI put options with a strike price of $49.00, symbol FXI150515P00049000, at a price of $1.98, or better, good till cancelled. |
Best wishes and stay tuned,
Larry
