We have another home run here, a 13.02% profit in only 6 trading days.
Friday the 13th seems as good a day as any to take a profit. Also, we are realizing 87.17% of the maximum potential profit in the S&P 500 SPDR’s (SPY) May, 2016 $210-$213 in-the-money vertical bear put spread.
In the highly unlikely event that we have a major rally in stocks next week, we now have new dry powder to play with, having cut our net short position in the (SPY) from 40% to 20%.
If you have the ProShares Short S&P 500 Short Fund ETF (SH) (click here for the prospectus), or the ProShares Ultra Short S&P 500 Short Fund 2X ETF (SDS) (click here for the prospectus), keep them.
We are going lower.
This trade takes our performance up to a blockbuster 10.37% so far in May, and 11.58% since the beginning of 2016. These are numbers almost anyone would kill for.
I never bought this week’s rally in the Dow Average for two seconds. No volume, no news, and no cross asset class confirmations meant it was not to be believed.
It was just another opportunity for the high frequency traders to pick the pockets of hedge funds by squeezing them out of their shorts, which they have been doing on a weekly basis all year.
That conviction allowed me to hang on to my aggressive 40% net short position, until now.
This takes my Trade Alert performance to a new all time high of over 203.26%.
Better yet, WE ARE POISED TO MAKE AS MUCH AS A 14% PROFIT BY THE END OF NEXT WEEK WITH OUR REMAINING POSITIONS!
To remind you of why we are short the S&P 500 in a major way, let me refresh your memories.
It’s all about the strong dollar. A robust buck diminishes the foreign earnings of the big American multinationals, major components of the S&P 500.
I think it is much more likely that stocks grind down in coming weeks to first retest the unchanged on 2016 level at $2,043, and then the 200-day moving average at $2,012.
Share prices are anything but inspirational here.
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