Trade Alert – (IWM) May 15, 2012

As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price.

Trade Alert (IWM)

Buy the Russell 2000 iShares (IWM) June, 2012 $80 Puts at $3.10 or best

Opening Trade


expiration date: 6-15-2012

full text to follow

Portfolio weighting: 5% = 7 Contracts

I am going to add to my existing short position in the equities market and buy more of the Russell 2000 iShares (IWM) June, 2012 $80 Puts at $3.10 or best. It is not just that the chart for the (IWM) is breaking down, showing a near perfect head and shoulders top. Everything is breaking down, simultaneously and in unison, including the S&P 500 (SPX), Gold (GLD), Silver (SLV), Oil (USO), Copper (CU), the Euro (FXE), and the Australian dollar (FXA). In the meantime, Treasury bonds (TLT), (TBT) are moving from strength to strength. The news from Europe can only get worse. A recession, considered impossible by strategists only a month ago, is now looking large as our own economic data continues to deteriorate. The flight safety has exploded into a stampeded, driving the US dollar index up 12 consecutive days, a new record.

Those who took my advice to sell short the (IWM) May $77 puts on a 1:1 basis can sit tight if they wish. These options expire at the close on Friday. Those few who managed to get a 1:2 ratio off can use this additional position to hedge their downside exposure for the next three days.