Weak Economy + Shorts/Put Options = Big Gains

Let’s face it – the ‘so-called’ second half economic never did develop and the outlook for 2016 looks pretty poor thus far too.

This was not hard to forecast – you simply needed to be paying attention.

The insight and analysis I do here at Aspen Trading cuts through the hype and routinely finds trades that reflect reality.

I wrote about this back in July and have been successfully trading with this bearish bias since then.

2016 will be a tough year if you believe that buying the f*%$@ing dips is the path to profits.

Selective and tactical trades combined with broad short exposure (short SPY or long SPY puts) is likely to be the best approach in 2016.

Don’t Let Your 401k Become a 301k, or Worse, a 201k

This is not a flippant comment. I am serious.

If you are simply holding mutual funds you are in the cross-hairs right now and run the risk of falling victim to the death spiral of draw-downs.

Our most recent position was to buy the Feb 33 Puts in Intel (INTC) ahead of their earnings on Thursday.

INTC was down 10% at one point on Friday and our puts doubled in value.  We closed 1/2 the position to lock in gains.

Overall, we have 5 open positions with unrealized gains of nearly $20,000*

Buy and hold portfolios/401k’s are experiencing the exact opposite.

Don’t become complacent.

Markets are closed on Monday here in the US and that could create yet more pent up selling pressure if Europe and Asian tank on Sunday/Monday.

While we appear to be oversold on a short-term basis I am in no hurry to pare back positions. If anything, a rally, which is increasingly likely, will allow me to add or build new bearish positions.

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