If recent trading is any indication, we could be in for a bumpy ride this week. And the source of that volatility will largely be related to news about the Federal Reserve. Stocks fell Friday and extended their losses Monday after a stronger-than-expected June jobs report threw some cold water on hopes that lower interest rates were imminent.
This week, all eyes will be on the release of the Federal Open Market Committee Minutes at 2 p.m. ET on Wednesday. Plus, Fed Chair Jerome Powell is scheduled to testify before the House Financial Services Committee on Wednesday and the Senate banking committee on Thursday. And monthly core-inflation data is set to be released on Thursday, which could offer insight into whether the U.S. economy is slowing and, by extension, whether the Fed may be more inclined to cut rates.
Of course, as I’ve been saying, this has been a lot of talk about what the Fed might do and very little action. And when it comes down to it, the only action I care about is in the market — because that is the action that can make us money.
We started off the week strong here at Daily Profit Machine with some fast gains on put options that capitalized on the market’s bearish move.
As you can see, those who followed my suggestion Monday had a chance to earn a double-digit percentage return in as little as 10 minutes. And traders who hung on till noon could have banked up to a 43% profit for the day.
If you check out what members have been tweeting, you’d see these kinds of gains have become the norm. In fact, Monday’s trade represented the 52nd trade in a row that had the potential to be a winner!
Monday’s trade was also another chance to capitalize on a bearish pattern that has served us well recently.
When I sent readers the Trade of the Day 30 minutes prior to the open, I told them that a pullback wouldn’t be surprising given that we had made new highs just two trading days prior. I said I was inclined to play the downside on a pop, consolidation and drop — i.e., a bearish head and shoulders. I also alerted traders that I believed there would be some rapid price action and told them to be ready to pounce on it:
“As usual, I encourage extended hours on SPY to be turned on should a head and shoulders set up right before the open, which we’ve seen before a few times! There is no high-impact news scheduled for today, so upon the opening bell playing out, I’ll be looking for clean technical patterns. As I’m typing, SPY $297, the premarket low, is holding well. I would love markets to pop, then drop, which would allow for a higher percentage return on put options. Going lower than $297 isn’t out of the question.”
The pattern played out exactly as I had hoped, and we started our week on a positive note! SPY closed just below the $297 level I mentioned, and I’m excited to see what tomorrow holds.
I’ll be up at 3 a.m., as I am every trading day, watching overseas markets and getting a read on how U.S. stocks will open. You know the old saying, the early bird gets the cash… or something like that.
Thankfully, you don’t have to be up in the wee hours of the morning analyzing charts and data if you want in on the action. All you have to do is check your text and email inbox at 9 a.m. ET (oh, and sign up here).
If you can do that, I’ll serve up what I consider to be the single best option trade for today on a silver platter.
A single trade. Buy to open. Sell to close. And you could walk away from the market in a few hours richer than you are right now.
America’s #1 Premarket Trader,