The Deja-Vu Bear Trap

If you're new to the New Money Club or have any questions about how to allocate positions or how to execute  trades, watch this video first.

Dear New Money Crew,

The march for new market highs continues, but we’re seeing the good old market tree shake. That’s when the market shakes out the weak hands before making the next leg higher.

Yesterday, the Nasdaq hit a new all-time high while the S&P 500 is only 1% from achieving the same - so watch out above!

The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX), is holding at 24. That means we’re still 2x the average level of volatility, so we’ll continue to see the markets whip around.

Patience and persistence are essential to keeping us on track.

Portfolio Update:

You've continued to knock it out of the park. Out of the last 11 trades, we’ve just closed out our 9th winner!

That means you've collected real-money gains of 349%. I'm so happy for your success. Trading is tough and not fun, but making money is fun!

Right now, we still have a few open positions that are sitting in the red, but don’t let that trick you. We have limited risk options with a lot of upside potential, so we’re sitting tight and letting this play out. 

It’s true, time’s not on our side, but a quick move can cause these options to go from red to green quickly.

On Monday, we added our newest position:

  • Buy-To-Open the Cameco Corp. (NYSE:CCJ) Sept. 18, 2020, $12 call (CCJ200918C00012000) up to $0.35 per contract or better, for the day.

And closed out this position:

  • Sell-To-Close the iQIYI, Inc. (NASDAQ:IQ) Aug. 28, 2020, $22 call (IQ200828C00022000) at the market.

Right now, our open positions are:

  • Nordic American Tankers (NYSE:NAT) Oct. 16, 2020, $5 call (NAT201016C00005000).
  • China Mobile Ltd (NYSE:CHL) Aug. 21, 2020, $40 call (CHL200821C00040000).
  • Box Inc. (NYSE:BOX) Aug. 21, 2020, $20 call (BOX200821C00020000).
  • Cameco Corp. (NYSE:CCJ) Sept. 18, 2020, $12 call (CCJ200918C00012000).

Now we wait and let the market come to us. And I’ll be keeping you updated every step of the way.

After-Action Report:

iQIYI, Inc. (NASDAQ:IQ) Aug. 28, 2020, $22 call.

Date: July 27, 2020.

Reason: Our system spiked on sure bet activity that these options would pop higher in the coming days.

Outcome: Closed for a 13% gain.

Notes: We played this exactly as we should, selling into strength. 

Shares moved higher the following day which left money on the table. But that’s hindsight, and it could have turned into a loser. While some members are frustrated with leaving money on the table by taking profits too soon, it's better to get out early and avoid the ups and downs. 

It never hurts to take profits too soon. Any new money you make is more than the money you had. And managing risk is an essential piece of being successful. Anyone can put on a trade -- it's how you manage it that counts.

I’m looking forward to answering your most pressing questions this Wednesday. If you want yours included, send it to questions@newmoneycrew.com.

Have a great weekend and I’ll have a new trade for you on Monday.

As always, you can track our portfolio here.

To your wealth, freedom and options!

Joshua Belanger
New Money Club