Take SDS Profits, Reload Protection
Sell SDS, Move Into FAZ
PLAY: Sell your SDS February 34 Calls (SSH BH) at market, good for the day.
PLAY: Buy the FAZ February 17 Calls (FEW BQ) at or under $1.60, good for the day. Place a protective stop limit at $0.90 and a pre-determined sniper sell at $2.50.
Dear Bottarelli Research Member,
Since our last alert, the markets have continued to drift lower, supporting the idea of increasing our level of market insurance. We’ll accomplish this by once again jumping into calls on the Direxion Daily Financial Bear 3X Shares (FAZ – NYSE).
But first, let’s lock in a very nice 32% gain on our SDS February 34 Calls (SSH BH). As you know, we entered these calls yesterday for $0.93 just in case the markets sold-off today. And just as planned, they’ve protected us perfectly. As I write, they’ve now hit a high of $1.23, good for a quick 32% gainer. Go ahead and lock in these profits now, and then we’ll quickly reload our protection using FAZ calls. First, here’s the SDS recommendation…
PLAY: Sell your SDS February 34 Calls (SSH BH) at market, good for the day.
After taking those profits, let’s move into FAZ. You see, going into today’s open, it was dangerous to own upside or downside exposure to the financial sector. After all, it was a coin flip as to how the markets would react to JPM’s earnings news. But now that the earnings are out, and we’ve seen the reaction, we can make our move.
Despite reporting a profit above $3 billion, continuing losses on mortgage and credit card loans in Q4 have squashed any hope that consumer credit is recovering. This perception adjustment could mean continued losses for the major financial firms. Combine this with a new TARP tax, and the financial sector looks like it’s on very thin ice. This gives us a nice opportunity to profit off any further downside using the FAZ. Get positioned now!
PLAY: Buy the FAZ February 17 Calls (FEW BQ) at or under $1.60, good for the day. Place a protective stop limit at $0.90 and a pre-determined sniper sell at $2.50.
And as always…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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