Trade Alert - (SDS) April 9, 2020

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

Trade Alert - (SDS) - BUY

BUY the 2X ProShares Ultra Short S&P 500 (SDS) at $25.10 or best

Opening Trade – NOT FOR THOSE WHO SUBSCRIBED THIS WEEK

4-9-2020

Portfolio weighting: increase from 20% to 30%

Number of Shares = 400

Given that I believe that the number of US Corona cases in the US could soar from 432,596 today to well over 1 million in coming weeks, I believe a shot on the short side here is justified, at least on a short-term view. Deaths will skyrocket from the current 14,831.

The (SPY) is now only 17.64% off its February all-time high.

We are about to see a parade of the worst economic numbers in history. We are entering a period of economic stress is will be far worse than what we saw in the 1929 Great Depression. There are no visible corporate earnings anywhere. According to the White House, some 200,000 Americans are about to die.

Is the cost of all this a mere 17.56% discount to the wildly inflating peak, when earnings multiples stood at a loft 20X earnings, an apex only seen once every 20 years?

I think not.

How will the market react? Not good, not good. At a minimum, we are about to retest the recent lows.

This position also has the advantage in that it hedges our existing long positions in the (VXX) puts, our short volatility positions.

I am therefore buying the ProShares Ultra Short S&P 500 (SDS) at $25.10 or best. This is a leveraged 2X ETF, meaning that it will rise at twice the rate that the (SPY) falls.

Don’t pay more than $27.00 or you’ll be chasing.

This is a bet that the S&P 500 will fall.

Here is the specific trade you need to execute this position:

Buy 400 X (SDS) at………….………………………….……$25.10

Net Cost:…………………………...………..………….….....$10,040

dollar cost = (400 X $25.10) = $10,040

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.

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