Archive Category: Max Profit Alert (Alerts)

To a trend-follower… If prices have been rising, you want to be “long” (aka “bullish”). If prices have been falling, you want to be “short” (aka “bearish”) or on the sidelines. It sounds so simple — almost too simple. But trend-following is the only strategy I know of that has a documented history of success that extends well over 200 years … and that works on every single asset class that it’s been applied to.

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).