A Market More Skittish Than a Long-Tailed Cat in a Room Full of Rocking Chairs
Everywhere you step, it seems like this market has a possible land mine waiting to trigger…
Land mine No. 1: We already have questions about whether or not a recession has started.
Over last week’s Tuesday and Wednesday period, the Dow dropped more than 830 points (or negative 3.1%), which represented the worst start to a quarter since 2008.
Right now, as you read this, the Federal Reserve Bank of New York places the odds of a recession at 38% in the next 12 months (which is based on the difference in yields of the 3-month and 10-year Treasurys).
Land mine No. 2: If that’s not worrisome enough, you also have the daily ramifications of the ongoing uncertainty surrounding the trade talks between the U.S. and China.
Discussions are occurring between lower-level officials, while the higher-level delegates will meet on October 10 and October 11. In the meantime, import duties on $250 billion worth of Chinese goods are expected to rise from 25% to 30% on October 15.
When it comes to the U.S.-China relationship, Maxim Group’s Nehal Chokshi says, “Elevated tensions are here to stay.”
So that’s two major news items affecting the minute-by-minute movements of the market. As traders, we must ask ourselves this: How do you trade in a market that’s more skittish than a long-tailed cat in a room full of rocking chairs?
The answer: You must be as balanced – and nimble – as ever.
For example, in The War Room, members have been trading in and out of Roku (Nasdaq: ROKU) with a high level of success.
As you know from previous Trade of the Day issues, I’ve been skeptical about the TV platform that streams various movies and TV episodes, live sports, music, and news to 27.1 million active accounts.
Back on March 25, I asked whether “streaming fatigue” could mark the end of Roku’s run. In the Trade of the Day issue I wrote, I brought up the idea that Roku may already be obsolete and that its stock seemed shortable using put options.
Then on September 11, we applied our bias using puts.
All the while, Roku stock has indeed pulled back, as you can see below:
Action Plan: I’m bringing this to your attention today because in the midst of the recent market selling pressure, Roku has been showing signs of bottoming out. If we see a market bounce, the digital media company could be one of the leading names fueling the upside move. In The War Room, members have been quickly trading in and out of Roku calls at various support levels we’ve identified – hitting quick, consistent and nimble winners in the midst of the market volatility. That’s what winning traders do. They trade in a way that makes money – whether they’ve been bullish or bearish on a company before.
If you want to know exactly when to buy and sell Roku – and make these quick-hit winners on a daily basis – you’re invited to join me in The War Room today!
[adzerk-get-ad zone="245143" size="4"]About Bryan Bottarelli
Whether it was selling the Star Wars figures he collected as a little boy for 50 times their value or using the $125 he made cutting grass to buy a Michael Jordan rookie card that he later sold for $1,500, it was always clear that Bryan Bottarelli was a born trader – possessing the unique ability to identify opportunities and leverage his investments.
Graduating with a business degree from the highly rated Indiana University Kelley School of Business, Bryan got his first job out of college trading stock options on the floor of the Chicago Board Options Exchange (CBOE). There, he was mentored by one of the country’s top floor traders during the heart of the technology boom from 1999 to 2000 – trading in the crowded and lively Apple computer pit. Executing his trades in real time, Bryan learned to identify and implement some of his most powerful trading secrets… secrets that rarely find their way outside the CBOE to be used by individual traders.
Recognizing the true value of these methods, Bryan tapped into his entrepreneurial spirit and took a risk. He walked off the CBOE floor and launched his own independent trading research service called Bottarelli Research. From February 2006 to December 2018, Bryan gave his precise trading instructions to a small, elite group – most of whom have been followers ever since.
As a “play tactician,” Bryan uses his hands-on knowledge of floor trading to shape opportunities and chart formations into elegant, powerful and profitable recommendations. And by using the same hedging techniques taught by professional floor traders, Bryan is able to deliver his readers remarkable gain opportunities while strictly limiting their total risk.
Along the way, Bryan has developed a cumulative track record that could impress even the most successful hedge fund manager.
He now spends his days moderating one of the most elite trading research forums ever created: The War Room.
