First, let’s be clear, this is a very volatile market and our first priority is to protect profits. It is critical to adjust your allocation for trade size way down, half or less of what you typically allocate to trades and also to keep the number of positions you are in very low and manageable. There are opportunities here but the risk level is high.

It is unlikely this drop is over, but it is wise to step back from trading the broader moves and be happy with our SQQQ wins from last week and this week.

Another smart tip in this kind of environment is to stick to tickers that you are familiar with and have been tracking. A ticker’s personality will remain, even in the headwind of broader market moves. With that said, let’s look at a couple trades on tickers we have been following that could have gotten oversold in the drop or are likely to go against the grain.

Keith Harwood turned us on to the momentum in LUV and it got sucked into yesterday’s tornado. It’s longer term trend is still in tact and it is a solid candidate for grabbing a potential bargain. Dec 18 45 calls are at about 2.60 and are worthy of consideration for a small position in this whirlwind.

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We mention USO in the update yesterday afternoon and it is a ticker that could go against the grain. There is high potential for additional conflict in Iran and they are now fully aware that their most powerful weapon was the impact they had on energy and oil costs. This is one to watch at the open and see how it acts in early in the market.

In the last 4 sessions it has dropped and then looked for support the next day. If it continues further, we can look at grabbing a put trade to ride it down. If it does find support (right now is is there at about 141) it could stage a move up. We will watch this closely.

All of this is in the context that watching from the sidelines and checking back in on Monday is an extremely viable approach. We will be keeping you updated.

Keep learning and trade wisely,

John Boyer

Editor

Market Wealth Daily