Futures trading lesson 12 pm

Good morning,

NOTICES:

1. BATMAN RETURNS! Come learn about FUTURES TRADING at 12 pm in the JBP chat room with multi-millionaire trader TAYLOR CONWAY. Click here to attend. What’s exciting about learning how to trade futures is the PDT rule does not apply. Taylor’s success as a trader is NOT typical and that’s what makes him a great trader to learn from.

2. LIMITED-SEAT OFFER! Lifetime subscription to Alpha Hunter with Jeff Bishop. Enrollment to the service closes when these seats hit 0 or the timer runs out. Last chance to get on board before his fresh $10,000 mission in NOVEMBER!

3. NEW TOOLS! It’s time to add tools to the JBP toolbelt. I’ve sat around long enough waiting and hoping for the small cap market to bounce and it’s done nothing but bleed. Since I don’t short most small caps, (no borrows) the goal is to work on my options trading to get bearish exposure when appropriate i.e. call and put options, including spreads. Additionally, I’m done with boring long-term trades. More on this below.

The market is in a clear downtrend and small caps are about 1% away from entering a bear market. The monthly chart shows we’re all the way back to pre-pandemic levels.

The 10-day and 50-day EMAs have broken and are about to crossover, leaving support around the 100-day EMA.

If $160 breaks the next level of support is $140.

This has put tremendous pressure on small caps making it nearly impossible to swing trade stocks overnight.

I’m still optimistic about a Santa Rally and January Effect, but can’t just sit here waiting any longer. I plan to day and swing trade small caps and options in JBP, so I can get short exposure in this downtrend.

And I think I’m permanently done with any long term ideas. They are boring. I still have VRAX at $.43 and LQMT at $.096 and this is the last we’ll be talking of those or any new long term ideas. I’ll no longer be providing updates on these trades. Instead I want to put my energy into learning FUTURES with Taylor Conway and sharpening the saw on my options trading.

Additionally, small cap momentum day trades will no longer be alerted to the RagingBull APP. These are moving around unpredictably lately and are best just to alert for those who can be in the chat room. Only swing trades will go to the APP from now on.

Oh, and if small caps enter a bear market, it’s likely tech stocks will follow. They’ve already entered a correction, however, price action is still above the 10-day EMA.

HOLDING:

I’m in UVXY $17.50 puts for this Friday’s expiration or November 3. My entry is $.49 and I anticipate adding to this position. The goal would be to exit on a move below $18. UVXY closed at $19.81 Friday and is currently trading at $18.75 Monday morning. UVXY has found support at $17 lately, so if that area falls, I could go as low as $14-$13.

ECONOMY:

There is no economic data today but then the week gets crazy. Wednesday’s Federal Reserve decision on interest rates is what’s in focus to start. That’s at 2 pm followed by Powell’s press conference at 2:30 pm. With the 10-year yield stubborn around 5 it’s unlikely they’ll hike. So what they project for December and Q1 2024 is that’s likely to move the markets. I suspect they are done with rate hikes, however, it’s unlikely they send that message.

Thursday is initial jobless claims at 8:30 am and Friday is nonfarm payrolls also at 8:30 am.

AAPL’s earnings are Thursday after the close. And while the big tech companies that have reported so far smashed earnings, sellers continue to pile into all spikes. We’ll see if that trend continues with AAPL.

WATCHING:

LIAN is a momentum stock I’m watching for a break of $4 because there's a range to $6 if that level falls. Last week it went from $1.37 - $4.28 and no doubt collected short sellers in the process. Dilution risk is low, the company is sitting on 96 months of cash. Ideally it holds the upper $3’s, but is in play as low as $3.50 for this plan.

EPIX is another breakout I’m looking to trade. Dilution risk here is low as well, with 86 months of cash on hand. The stock has been resilient against a weak market and if $5 breaks, it has blue sky potential to $10. I’d like to see it trading around $4.50 to feel confident and it’s in play as low as $4.20.

IWM puts, 2-3 weeks out, delta 60 or higher, on any bounce to the 10-day EMA, which is currently at $167. Until the IWM breaks and holds the 10-day EMA as support, it’s bearish and I’ll look to buy directional puts.

UVXY $19 puts expiring 11/10. Between the 2 wars and 10-year yield hitting 5, VIX has remained strong since the middle of September. This is rare for the VIX and odds favor a pullback in November. Assuming rates do not go up, as earnings season winds down I think $13 is within range by the end of the month.

AAPL iron condor. The expected move this week is +/- $10.63 so I’ll be looking to do a -$175 / +$177.50 bear call and a -$160 / +$157.50 bull put expiring 11/3.

EDUCATION:

When trading momentum stocks and options it’s important to monitor the tape, internals, and flow. The tape refers to level 2 and order flow. Internals for me are UVXY for fear and $TICK for buying / selling pressure. Finally flow refers to BlackBox Stocks unusual options activity, sweeps, and the squeeze-o-meter. I will look to produce new video lessons on all of these by recording some of my trades going forward.

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