January 2, 2015  Trade Alert -  Pattern Play  Portfolio – LIMIT ORDERS

The stock has fallen 10% this week, a large move in the opposite direction that the historical pattern would predict.  VIX is well above where it started out the month, and a large upside move seems all but assured over the next month.  Our best bet right now is to close out our positions at a loss for this month and establish new positions for next month on Monday (increasing our investment to $1000).  10% moves are twice as likely to occur on the upside as they are on the downside when VIX is over 15 according to the historical pattern.  An upward move of that magnitude will recover more than what we lost this month:

BTC 1 SVXY JAN1 15 73 call (SVXY150102C73) for a limit of $.05 (no commission)

STC 1 SVXY Jan-15 67 call (SVXY150117C67) for a limit of $2.20

STC 1 SVXY Jan-15 70 call (SVXY150117C70) for a limit of $1.15

STC 1 SVXY Jan-15 71 call (SVXY150117C71) for a limit of $.90

 

Happy trading.

 

Terry