I’ve been warning traders that the market could stand to cool off a bit. And as I looked at multiple charts across the world in the early hours of the morning (as I do every day), I had a feeling we would get a pullback today.
I say I “had a feeling,” but what I sent out in the Trade of the Day half an hour before the market opened was a lot more specific:
“As I’m typing, indicators are bearish with $293 being SPY’s key support right now. Below that we could see $292, a level I’ve mentioned multiple times recently. Right now, the strongest resistance on the chart I’m seeing is the $294 level I mentioned yesterday.
“What I would absolutely LOVE to see is a potential pop at or near the open followed by an exponential moving average line crossover to the downside and look to buy to open put options… Markets don’t have much reason to bang higher right now and have been extended.”
My analysis was spot on.
SPY popped just before the open, and by 9:33 a.m. ET — three minutes after the opening bell rang — the ETF had dropped about $1, straight down to the $293 level I mentioned.
While a $1 move isn’t extraordinary, those who heeded my Trade of The Day could have made 30% in just three minutes. That’s 10% per minute thanks to the leverage of options. (Hell, I know stock swing traders who are psyched if they can make 10% in three days!)
By 10:30 a.m. ET, SPY had dropped almost $2, and the profit potential for the put option I suggested had shot up to 73%.
Here’s what a few of the happy traders in my chat room had to say about today’s trade:
sandra kin: out puts +$700 now taking my happy dance to Zumba
michelle all: out puts +23.53%
dikra mub: SPY 293 puts 20 contracts +73% thanks Davis!
I often preach to traders to “pay yourself first,” a little bit of financial wisdom attributed to the Oracle of Omaha.
While Warren Buffett was actually referring to saving versus spending, many traders have adopted this mindset when it comes to taking profits off the table. As another old market adage goes, “No one ever went broke taking profits.”
So, even if you had only caught part of today’s move, the Trade of the Day still could have made you a great profit.
Check out what another trader had to say:
He was able to make a 19% profit in 40 minutes despite not timing the trade perfectly.
That’s part of the reason my strategy appeals to beginners and experienced traders alike.
Another reason is the consistent profit potential.
There have been 17 trading days so far in June. Every single one brought an opportunity to profit from my Trade of the Day. And six of those trades offered the chance to more than double your money.
I have high hopes for tomorrow’s trade, as well, as we could see some volatility around the GDP report, which is scheduled to be released at 8:30 a.m. ET. More volatility means higher percentage moves to capitalize on.
If you’re interested in joining me before you miss another trade, you can get a year’s worth of my Trade of the Day for just $999.
But I suggest you act quickly, as this deal won’t be available for long.
America’s #1 Premarket Trader.