Invest and Trade Profitably with Jon Johnson

Weekender for 10/9

1. Market Summary

Stocks Pause a Second Day

  • Stocks pause a second day with lateral moves at support.
  • Interest rates rise, dollar rises, Fed-speak hawkish, stocks struggle.
  • Ready to continue the bounce, but the jobs report has to be “right.”
  • Consumer Price Index (CPI) looms next week regardless of the jobs report outcome.
  • Advanced Micro Devices, Inc. (NASDAQ: AMD) warns/preannounces weak numbers after hours, blaming lack of personal computer (PC) demand, supply chain issues.
  • Key inflection point ahead of a three-day weekend.

The stock indices closed lower as bond yields rose again and the dollar posted gains again. The cause was the old mix of market negatives with some Fed-speak mixed into the batter. Case in point, afterhours Federal Reserve Governor Christopher Waller says interest rates hikes are anticipated into early 2023, that the recent reports do not suggest easing the tightening path. Earlier, a quintet of speakers again clarified the Fed’s stance.

W3BX Las Vegas Conference!

I am excited to announce that I will speak at the W3BX conference October 10-13 in Las Vegas.  Join some of the biggest names in the industry, including my colleagues Bryan Perry, Jim Woods and our publisher Roger Michalski, to learn more about investing in blockchain, cryptos, NFTs, Metaverse, Mining and all things Web 3.

The Web 3 sector is expected to grow from $3.2B to $81.5B by 2030.  The more you know about it, the more potential money you can make from this explosion.

Click here now to learn more about the conference and be sure to enter the code “EAGLE” when you register to save 20%.  I will see you in Vegas!

NOTE: The figures and information above are from the 10/6 report.

Watch the Investment House Videos For This Week Here!

NOTE: The videos are from the 10/5 report.

2. Targets Hit

Vale SA (NYSE: VALE): Commodities, the hard stuff, rallied into early 2022 and then struggled over the summer and through Q3. That struggle, however produced some good bases, indicating hitting the “hard stuff” in Q4 would pay off.  VALE is the largest producer of iron ore and nickel, and it also produced a very nice cup pattern from the June peak into late September.

We were watching VALE in Investment House Daily because we knew that commodities would come back into Q4 and 2023, and we saw it brewing a trend break. Thus, as it gapped over the 50-day exponential moving average (EMA) the past Monday, we were ready. When it made the move, we issued an entry alert to pick up stock for $13.88 and the December $13 call options for $1.68.

VALE closed nicely higher that session, running “wire to wire” with the gap and rally into the close. The next session, VALE gapped and rallied again, running up to the 180-day moving average (MA). That put VALE up three straight sessions in a big move to some resistance.

We calculated VALE would pause there, and with a 35% gain in hand with less than a full session in the trade, we issued an alert to sell half the options that were bidding for $2.28 and a 35+% gain.  Ahead of the jobs report on Friday, it was not a bad idea to bank some of the bird in the hand.

Sure enough, VALE paused at the 180-day MA on Wednesday and Thursday, then started back upside Friday.  Now we have a good shot at the 200-day MA, and we can let VALE work for us after putting a nice chunk in the bank.

We also took gains in the following positions:

ConocoPhillips (NYSE: COP): 65% gain in the options.

Marathon Oil Corporation (NYSE: MRO): 26% gain in the options.

ProShares UltraShort QQQ (NYSEARCA: QID): 41% gain in the options.

Visa Inc. (NYSE: V): 140% gain in the options.

Receive a risk-free trial to Investment House Daily and save 50% by clicking here now!

ProShares UltraPro Short QQQ ETF (NYSEARCA: TWM):  With the market having sold off to the June lows in a four-rotation move from the August high, impressively negative internals and massively negative sentiment, stocks were primed to bounce. Small-caps proved to be leaders in the market upside moves, so we were looking to play a rebound in Technical Trader Alert.

We looked at the usual suspects, e.g. the iShares Russell 2000 ETF (NYSEARCA: IWM), but many of those did not have great numbers. In other words, the move likely would occur, but the metrics of the options just were not going to produce sufficient return for the risk.

Okay, so we opted to try a different angle: shorting (with put options) the inverse Russell 2000 (RUT) ultrashort exchange-traded fund (ETF). In English, that means we would buy puts on the TWM, an ETF that moves up when RUT moves down. If RUT bounced, TWM would fall, and our puts would rise.

On Sept. 26, TWM showed a hangman doji at resistance just off the June low for RUT.  Given that doji at resistance, we issued the alert to enter November $20 put options for $2.50. During the next session, TWM faded but didn’t tank.

After that, however, TWM started a slow move lower into the prior Friday. On Monday, TWM gapped lower.  On Tuesday, it gapped down again and sold to the 50-day EMA at the close. Given the 50-day EMA was holding toward the close, we issued an alert to sell half the options. They were bidding at $3.50 for a 40% gain.

During the next session, TWM was up, it was down, it laughed, it cried … but it did not break the 50-day EMA.  The bounce in the market was perhaps already running out of gas. Accordingly, we issued an alert to sell the rest of the options for $3.60, a 44% gain. TWM did bounce, as the market sold on the jobs report that Friday.

We also took gains in the following positions:

Murphy Oil Corporation (NYSE: MUR): 73% gain in the options.

Nio Inc – ADR (NYSE: NIO): 107% gain in the options.

Exxon Mobil Corp. (NYSE: XOM): 50% gain in the options.

Receive a risk-free trial to Technical Trader and save 50% by clicking here now!

We scored some rapid profits indeed the past week in Rapid Profits Stock Trader, with three trades initiated, three trades banked within one to two days. We saw great setups in the minerals and metal miners, and when they moved, we moved in, rode the surge and took the gain.

Peabody Energy Corporation (NYSE: BTU): Entered Oct. 3, sold Oct. 5, banked a 6.8% gain.

McEwen Mining Inc. (NYSE: MUX): Entered Oct.5, sold Oct. 6, banked a 8.05% gain.

Vale SA (NYSE: VALE): Entered on Oct. 3, sold Oct. 5, banked a 5.7% gain.

Now is a good time to become a member of Rapid Profits Stock Trader. The system is geared towards bringing you consistent, short-term gains of 5-10% and you can expect four to six trades every month.

To receive a risk-free trial and save 50%, click here now!

3. Covered Call Options Play

Funko Inc. (NASDAQ: FNKO) — Funko Inc. is currently trading at $21.31. The Nov. 18 $22.50 Calls (FNKO202211018C00022500) are trading at $1.55. That provides a return of about 14% if FNKO is above $22.50 by the expiration.

Learn more about our Covered Call Tables here!

Log In

Forgot Password