The U.S. stock markets briefly spiked higher yesterday after the Fed announcement, before retreating into the close. Unfortunately, because of this brief rally, you were stopped out of your ProShares Ultra VIX Short-Term (UVXY) and your ProShares UltraShort Dow30 (DXD) positions yesterday, but at very modest losses.
And that stinks, because shortly after, the rally fizzled and this morning, the markets, across the globe, are down hard.
It’s easy to sit back and say, well, if we just had wider stops, we would still be in the market and would not have been whipsawed. It’s easy to be frustrated and emotional over getting hit like that yesterday.
I fully understand. And since many of you are new to trading, it can be even tougher for you to experience.
But let me make this perfectly clear: Sometimes getting stopped out like yesterday, only to find the market turn around and go back in the direction you expected – happens, even to the biggest, most experienced traders in the world.
It comes with the territory. When it happens, you must remain calm, unemotional and thick-skinned. The most important thing is to remember that you stuck to your stop, your plan, and even if it didn’t work out …
A. You know you maintained strict money management and that the loss was minimized, for the market could have gone even further against you. And …
B. You can always get back in, or move on to a new opportunity.
And that’s precisely what we’re going to do. I have two new recommendations.
First, the tech-heavy Nasdaq is now the weaker of the broad indices. So I recommend you purchase shares in the ProShares UltraShort QQQ, symbol QID. This ETF seeks daily returns, that correspond to two times the inverse (-2x) of the daily performance of the NASDAQ-100 Index.
See the details below.
Second, I do want to get back into UVXY, but on a slight pullback from its current price. We will also have to place another wide stop. I will tighten the stop as soon as possible.
IMPORTANT: Do not buy the above two recommendations at the market. Stick with my limit prices and recommended stops. If anything needs to be changed I will let you know.
Separately, gold is rallying strongly this morning, up over $21, trading at roughly $1,137. Hold your shares in UGLD with your stop in place. Also hold your UNG shares, with its stop.
Now, to today’s trades:
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For all subscribers, for every $25,000 you are trading: 1. BUY 100 shares of ProShares UltraShort QQQ, symbol QID, at $34.50 or better. Place a protective sell stop at $30.17 stop, good till cancelled. 2. BUY 50 shares of ProShares Ultra VIX Short-Term Futures, symbol UVXY, at $48.00 or better. Place a protective sell stop at $32.14 stop, good till cancelled. |
Stay tuned and best wishes,
Larry
