Told You So Tuesday – China Drops 5.4% Overnight

Well that didn’t take long, did it?

Our Nikkei and EWJ short positions continue to rake in the cash as that index drops another 122 points overnight but, more to the point, we nailed the switch to the fresh horse of China for our readers, as FXI topped out right at our $42 target, almost to the penny, before dropping back into the close and this morning the Shanghai Composite dropped 5.43% from above the 3,000 line – all the way back to 2,856.  

Now, I can only tell you what’s going to happen and how to make money betting it – the rest is up to you.  For our Members (and you can get this kind of money-making information every day by joining us HERE), our trade idea for shorting FXI with options was the Jan $40 puts at 0.88, and we picked up 20 of them in our Short-Term Portfolio for $1,760 – and those should do very nicely for us this morning. 


Our whole Short-Term Portfolio performed well yesterday, gaining $5,000 (5%) as the market dropped, which is what it’s designed to do as a counter-balance to our bullish Long-Term Portfolio, both of which we reviewed extensively over the weekend (sorry, Members only).  

There are just 13 position in our STP and they are, of course, generally bearish.  Very bearish, actually as they gained 5% on a day the S&P only dropped 0.71% – today should be interesing indeed (and we have a Live Trading Webinar for our Members at 1pm).

We titled yesterday morning’s post “we nailed the switch to the fresh horse of China for our readers” and I sent out an Alert to our Membersand for FREE to our FaceBook Followers regarding the dreaded “Hindenburg Omen” as well as actual news I found disturbing over the weekend.  As I mentioned, we already had a substantial short position in our Short-Term Portfolio and, frankly, we thought the drop would begin last week.  In our $25,000 Portfolio Review, we elected to pick up the DXD (ultra-short Dow ETF) Jan $22 calls at 0.70, and those should be doing well this morning as the Dow Futures are pointing to another 100-point drop today. 

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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