I’ve been involved in the market for 16 years…
With the exception of the subprime fiasco that helped me capture some incredible gains using put options on the overall market and subprime, Alt-A names, Bear Stearns and Lehman Brothers, I’ve never seen a market quite like this.
One day, we’re running higher on nothing.
The next day, we’re losing our minds, watching the market dip on the reality that our economy really isn’t as strong as we were promised. Folks still believe unemployment is improving even as 98 million people fell off the job force.
It’ll continue to be a tough market for quite some time.
But opportunities do exist. For example, when we learned that Puerto Rico could potentially default, we took a stock position in Assured Guaranty (AGO) and the Market Vectors Short Municipal Index ETF (SMB).
AGO – bought at $23.90 – now trades at $26.45. I’m recommending that you close that position to secure the gain. The stock looks a bit tired after a recent run.
I’m also recommending that you exit the SMB trade – picked up at $17.30. It now trades at $17.48. Sell it. It could fall apart… and I’m not interested in losing money on it.
While I recommend holding all other trades, I am issuing new ideas using an over-extended, overbought trade on TLT and an over-extended oversold trade on TBT.
I’ve traded both for years, using my momentum indicators to dictate when I should buy and sell. As the TLT becomes a bit technically over-extended above its 200-day average, it’s showing signs of exhaustion. Once the selling pressure kicks in, I’d like to see a move to the 50-day MA around $119.
I’d like you to consider taking a position in the TLT November 2015 23 put up to $4.30.
As for the TBT, it’s oversold, over-extended at prior support. All I want to do here is take a quick gain… and walk away. I’d like you to consider taking a position in the TBT December 2015 44 calls up to $3.45.
Let’s get back on the winning streak we enjoyed before the market lost its marbles.
We’ll talk again soon. If you have any questions, I’m happy to help.
All my best,
Ian L. Cooper
Rapid Retirement System