Editor’s Note: In issue #206, the data cited on the FXI put options was incorrect. The numbers have been revised below, and we are resending the issue in its entirety. We regret the inconvenience.
No sooner …
Issue #206
Dear Member,
No sooner than my earlier issue went out this morning, and the markets started moving – our way!
The fundamental backdrop: Beijing clamping down on margin buying and ordering brokers to make more stock available for “short-selling.”
In other words, Beijing wants to cool off its blistering stock market, precisely what my models were telling me, because a correction was way overdue.
As a result, the FXI put options have jumped $1.04 as I pen this issue, more than doubling from $0.50 – yesterday’s close – to $1.54 right now, putting the position in positive territory.
In addition, the dollar is starting to rally again, as it now appears the euro and other major currencies may be topping, finishing off their recent bounces.
On top of all that, the Dow Jones Industrials are down over 249 points as I pen this issue, which will help boost your inverse ETF on the Dow, DXD.
It’s a wee bit early to celebrate, but the reversals I’ve been expecting in many markets are now showing signs of gathering strength.
Lastly, gold’s up a mere $6, a very weak rally considering the stock market is down 249 points. That’s a bearish sign for gold as well.
I’m watching the markets very closely right now, as the cyclical turn that is unfolding now could be presenting you with numerous trading opportunities early next week.
Best wishes,
Larry
