Greetings Fellow Secreteer,
Earlier this week, one of the nation’s chief economists compared what we’re seeing in the financial markets to a roller-coaster ride of many sleepless nights and a decade of no returns. He pointed out that this has been the worst market cycle since 1937, followed by the best one since 1932, followed by the worst May since 1940. As an investor, he recommended a classic long-term outlook using short strategies to protect oneself against big drop-outs in the market. Bear markets, he said, typically run in three cycles: a sharp downturn, a rebound and then a drawn-out fundamental downtrend.
That outlook should have most traditional investors curling up in the fetal position under their beds longing for their long-lost teddy bears.
According to this leading economist, we’re already beginning this third cycle--BUT he also went on to say that this was a perfect environment for “income-oriented” investment strategies (sometimes I feel like Pavlov's dog--the word 'income' invokes instant attentiveness). If this guy is right we’re in the perfect environment to be an options trader--our particular kind of options trader. With no other choice but to trade the upside, 401Ks and other mutual funds will certainly struggle. Long-term investors will most likely tread water like they have for the past ten years. But as spread traders, we have a REAL shot at creating an ever-increasing monthly income through what I am convinced will increasing prove to be the winning secret.
Trader’s Tip:
Historically,
The “Summer Rally” is generally the weakest of all four seasons.
For the week after June expiration, the Dow has been down 17 out of the last 19 years.
June ends NASDAQ’s best eight months of the year.
Tuesday, June 1st and Wednesday June 2nd are bullish trading days.
Key Dates:
June 17th--options expiration for some indices.
June 18th--options expiration for all equity and all other index options.
July 15th--options expiration for some indices.
July 16th--options expiration for all equity and all other index options.
Market Outlook:
Last Friday’s job’s report was a big disappointment for Wall Street which ultimately sent stocks tumbling causing the Dow to break the 10K psychological barrier and ending down 323 points or -3.15% on the day. The drop created the lowest close since February and the 3rd worst for the past year. It appears that all of last month’s job market gains were largely due to government hiring and unfortunately not the private sector. For the month of May, just 41,000 employees were hired as compared to 218,000 for the previous month. In a bit of a twist, the government said 431,000 jobs were created last month but the majority of them (411,000) came from temporary hiring of census workers. Even this number fell short of expectations because the projection was for 513,000 new jobs.
Adding to the sell-off was the news of yet another European country announcing financial fraud and a 'situation far worse that anticipated'. A spokesman for Hungary’s prime minister stated that its economy is in a grave situation and it hopes to avoid a crisis and bailout similar to that of Greece. Interesting enough, Hungary is not a member of the European Union and does not use the euro currency. For this reason the EU will not necessarily jump to save Hungary and there is a very real possibility that the country may soon be in default. Spain and Portugal also continue to struggle as the euro has fallen by more than 10% since stocks topped out about six weeks ago. Regardless of what happens, continued weakness throughout Europe will make it a lot more difficult for the U.S. economy to recover--for two reasons--1) our major corporations sell into the European market and as the consumer over there becomes more strapped demand will fall--and 2) European debt adds to our debt because we are the largest funder of the IMF.
Meanwhile back here at home regulators shut down another five banks in Nebraska (1), Mississippi (2), and Illinois (2). That’s 81 bank failures so far since January and the FDIC expects that the final cost in resolving all bank failures to be somewhere in the neighborhood to the tune of $100 billion over the next four years.
According to another leading economist, the global debt issues that we’re facing will most likely last another 6-8 years. And during that time low market returns and wild stock market swings will be the norm so whatever your trading style this 'new reality' needs to be considered. Fortunately we use a strategy that--win, lose or draw--we are out of in eight weeks or less.
What are the Secrets of the Week?
Fundamentally, as one could probably guess, the trend line for U.S. equity prices will be down with sessions of intense volatility. To compensate for this, we’ll continue to play bearish spreads whenever the ROI is sufficient and also incorporate neutral plays with the highest probability wins. For this week, there’ll be two plays--both of which take advantage of the market’s soured sentiment, increased implied volatility and as such, higher probability of win---so let’s get to it...
You can get in on these trades along with two new high-probability trades per week by clicking here now. www.thewinningsecret.com
Stack the Deck on Every Trade,
Robert
To all our subscribers, God Bless and have an awesome trading week!
Your comments, questions and feedback are always welcome: customerservice@cashflowheaven.com
PO Box 554, Ashland, OR 97520 www.cashflowheaven.com/ws 877-507-7878
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