Invest and Trade Profitably with Jon Johnson

Weekender for 7/17

1. Market Summary

Producer Price Index (PPI) Jumps Past Expectations

– JPMorgan Chase & Co. (NYSE: JPM) and Morgan Stanley (NYSE: MS) miss, and the PPI overall jumps past expectations. Stocks fall but again rebound from the same lows.
– Overall, the PPI is scorching hot, but Fed-speak debunks talk of a 100 basis point July interest rate hike. Stocks surge back upside in response.
– Semiconductors are still setting up well, but overall, the index patterns remain weak and are leaning to more downside versus a rebound.

For a second session, the market was pelted with bad inflation news. The Consumer Price Index (CPI)/PPI combination fanned more talk of a 100 base point rate hike during the next Federal Open Market Committee (FOMC) meeting. This subject was breached once more after Wednesday’s scorching CPI. On top of that, JPM missed top-line and bottom-line expectations, as did Morgan Stanley. Jamie Dimon had little positive to say. Okay, he had nothing positive to say, economically speaking.

NOTE: The figures and information above are from the 7/14 report.

Watch the Investment House Videos For This Week Here!

NOTE: The videos are from the 7/13 report.

2. Target Hit

ProShares UltraPro Short QQQ ETF (NYSEARCA: TWM): With the economic issues confronting the United States and other world economies, you have to consider the small-cap stocks, as they are a domestic economic harbinger. In early July, the market bounced, and the small-cap Russell 2000 (RUT) index bounced as well. It bounced, but it did so right into some resistance. Indeed, RUTX gapped up to near the 50-day moving average (MA) and showed a doji. In a market downtrend, that is a downside opportunity.

TWM is a way to play declines in the RUT with upside positions. It showed a doji above the 50-day exponential moving average (EMA) at the same time that RUT was showing one below it. That was a Friday, and on the following Monday, RUT fell. Thus, TWM bounced.

That was our entry signal, and we issued a Rapid Profits Stock Trader alert to buy TWM for $18.64. Our specific target was the late June peak. This was an intermediate high that formed after TWM peaked in mid-June. The market is moving back and forth each session, but the trend is lower.

Thus, even as TWM moved, it bounced back and forth. Nonetheless, we let the position work, and on Thursday, the market overall sold off early on the PPI data. That sent TWM to the target. So, we issued an alert to sell the position at $19.62 for a 5.2% 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.

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3. Covered Call Options Play

Target Hospitality Corp. (NASDAQ: TH) — Target Hospitality Corp. is currently trading at $12.00. The Aug. 19 $12.50 Calls (TH20220819C00012500) are trading at $1.25. That provides a return of about 17% if TH is above $12.50 by the expiration.

Learn more about our Covered Call Tables here!

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