Archive Category: Max Profit Alert (Alerts)

We made a lot of money on our recent bearish “short” trade on the iShares Russell 2000 ETF (NYSE: IWM). I recommended entering that trade several days after I saw this pattern develop in shares of IWM.

Last week, I went through our six open positions and shared my expectations…

In my update on Tuesday, I ran a “what-if” scenario that showed the potential for our $190-strike put options on the iShares Russell 2000 ETF (NYSE: IWM) to skyrocket to as high as +700% if shares of IWM dropped to $145. Now, I don’t see that scenario as likely. In fact, what’s transpired since Wednesday afternoon’s Federal Reserve minutes has me believing that a short-term bounce in stock prices is now in the works.

Stocks did not like the Federal Reserve’s half-point rate hike last Wednesday. After surging higher for a couple of hours Wednesday afternoon, major indexes erased all of Wednesday’s gains and more on Thursday. Stocks continued to slide on Friday … and have opened lower again this morning. I’m long-term bullish. But it’s clear that in the short term, investors are growing more nervous to hold stocks, and the dominant market trends have turned from bullish to bearish. We had the foresight to add a hedge position just over a month ago: put options on the iShares Russell 2000 ETF (NYSE: IWM).

Stocks are struggling… The S&P 500 hasn’t made a new high in 78 trading days. It’s been even longer for the tech-heavy Nasdaq 100 and the small-cap Russell 2000 — 107 and 116 days, respectively. Both indexes are now in “bear market” territory. Of course, we maintain a bullish leaning here at Home Run Profits. Five of our six open positions are in diversified “alternative” plays — on gold miners, silver, energy transportation, Canadian stocks and real estate investment trusts (REITs).