Add Protection, Part II
Add FAZ Calls
PLAY: Buy the FAZ March 18 Calls (O:FAZ 10C18.00) at or under $1.50, good for the day. Place a protective stop limit at $0.95 and a pre-determined sniper sell at $2.50.
Dear Bottarelli Research Member,
I mentioned this morning that we might consider jumping back into SHLD. Thus far, it’s not time to make this maneuver. SHLD has now dipped below the $95.00 support, so before making our next move we must see signs of stabilization. Thus far, we have not seen such indications. Therefore, I’ll continue to watch it for the next opportunity.
In the meantime, the S&P 500 chart that I gave you in your last alert continues to concern me. Further supporting this concern is the Dow chart, which also shows a similar failure at the 50-day moving average.
Combine the bearish indications of both the Dow and the S&P 500, and we must continue taking precaution. As you know, we just added the SDS March 35 Calls (O:SDS 10C35.00) for $1.60. But considering the fragile state of the markets, I think we need to add another protective position to our ledger. We’ll accomplish this by using the Direxion Daily Financial Bear 3X Shares (FAZ – NYSE).
As you know, the FAZ moves at a rate of 3x the inverse of the financial sector. Therefore, if the top financial stocks are down 2% on the day, the FAZ moves up 6%. If we get another financial-sector scare, the FAZ can move up rapidly. Let’s get positioned to profit off this move now!
PLAY: Buy the FAZ March 18 Calls (O:FAZ 10C18.00) at or under $1.50, good for the day. Place a protective stop limit at $0.95 and a pre-determined sniper sell at $2.50.
And as always…
Lock and load!
Sincerely,
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