This Market Is as Ugly as March 2020
And a green light means volatile moves ahead. Volatility is going to go up…
While the market, in turn, goes down.
The VIX index is trading above the February futures. The February futures are trading above the March futures.
That means we’re in backwardation.
This is an environment where the market could be up 60 points and down 50 in the same day.
And frankly, I haven’t seen a market this ugly since March of 2020.
We’re in a classic set-up for a Monday crash.
We had an ugly Thursday, the S&P closing down 1.4% yesterday.
We’re in the red again today.
If we close down again today, people are going to get spooked over the weekend and sell first thing Monday morning, setting us up for a potential limit-down open.
It’s times like these that the ever-bearish UVXY could actually go up. And this might be a situation to look at some calls.
Instead of GM, Trade Ford
Someone bought 14,000 of the April 14 $60 calls for $3.05, and simultaneously sold the April 14 $70 calls against it, taking in a premium of 85 cents.
In total, this big-money buyer spent over $3 mil on a bullish GM bet.
GM’s had a negative 2022 so far. And while I’m interested in piggybacking the automakers, I’m not doing it with GM.
You guessed it – I want to go long on Ford.
This week, in the Profit Revolution trading room, I went long on F before I even saw this big money trade on GM.
Now, I can’t give you all the details – those are reserved for my members. But know this…
We opened an asymmetric call option for just 82 cents. Forget paying $3 mil – with this trading strategy, you can make the same bets as the big money for a fraction of the price…
And every trade I recommend has the chance to make 100% or more in 30 days or less.
Want trade recommendations like the one I gave on F five days a week, every week?
Three Earnings Plays: NFLX, AAL, & XOM
Netflix Inc. (Nasdaq:NFLX) beat estimates on its report last night – but it still got smoked as shares fell 20% on a slowdown in new subscribers.
American Airlines Group Inc. (Nasdaq:AAL) has been dropping since posting its highest revenue since the pandemic.
These are the first two stocks on my Watchlist today – and their stories tell me one thing…
You can’t predict what a report will say. But even if you could, you definitely don’t know where the stock will go in response.
Don’t trade through a report. Trade TO it.
There’s a real trading opportunity leading into earnings as implied volatility (IV) rises to the report, sending option prices higher.
And we’ve got more than a week until Exxon Mobil Corp. (NYSE:XOM) is set to report…
Meaning this oil name is poised for a pre-earnings trade.
This is how I plan to trade XOM – and the rest of the almost 700 companies set to report this month.
Most people trade earnings the wrong way. But with this strategy, you can make some real pre- and post-report profits.
- Netflix Inc. (Nasdaq:NFLX)
IV is going to drop post-earnings, which would be an opportunity to buy a dip or sell depending on flow.
- American Airlines Group Inc. (Nasdaq:AAL)
When it is below $17, AAL has been a buy. And it’s at $16.28 as I type. IV is getting smoked here after earnings, and we could buy the dip with the February $17 calls.
- Exxon Mobil Corp. (NYSE:XOM)
Near-term, oil has probably topped. But we could have a chance to buy a put leading into earnings…
Which is exactly what I’ll be watching for in the Profit Revolution trading room next week.
Have a great weekend,
Founder, Profit Takeover
One response to “The Market Is Set Up for a Monday Crash”
January 21 2022