Get Ready: 6 Rules for Negative Momentum

[] Today's market commentary from TradingPub is here! To view this email as a web page, go [here.]( To view this email as a web page, go [here.]( [] [] [] Get Ready: 6 Rules for Negative Momentum Everyone panic! [] As I’ve discussed over the last two weeks, momentum has been bouncing back and forth due to ongoing concerns about global liquidity, collateral quality and seasonality. We had a similar short squeeze last year that ultimately led into a September sell-off. Markets are back under pressure Wednesday. About 70% of public companies are off, 68.5% of all stocks are under their 50-day moving averages, and concerns have elevated that the 10-year bond and interest rates MUST MOVE HIGHER (duh!). Today, we’ve had our momentum readings bounce between neutral and negative. And now, it’s looking like the latter will be the reading heading into Thursday morning hours. You know what that means? It’s time to follow rules. Rule 1: Cash Is Your Friend I move to cash when momentum turns negative. I know that sounds crazy. I sell everything? Well, I don’t sell everything in my retirement account. But my trading account? Yes… I move to heavy cash. I’ve already made that move. I’m mostly out of long positions in options, and I position my cash for buying opportunities. Since I’m an active trader and investor, I focus on key technicals that allow me to look for new entry points. The move to negative momentum is very important, as I protect as much capital on the balance sheet as possible. This is how I can buy for a dollar and sell for two dollars multiple times yearly. Rule 2: Don’t Sell Puts, Unless… See Rule 6 If I find myself selling put spreads as an entry point, now is not the time for me to open new positions… If I sold previous cash-secured puts or put spreads, I entered this with the mindset that I was willing to buy the stock at a lower price. If I’m up on my current position, now would be a good time to take profits. If I’m down, now might be the time to assess whether I want to sell spreads at an even lower price. When momentum goes negative, selling can be indiscriminate. That means nothing is safe. The last thing I would want to do is have exposure to a $50 put when the downside for a stock is much lower. Rule 3: Learn Implied Volatility Rank One of the great rules that I learned from my time with tastytrade and Tom Sosnoff was how to know the difference between cheap options and expensive options. I use a tool on tastyworks called Implied Volatility Rank (IVR). This measures the implied volatility of a stock TODAY compared to its IV during the previous 52 weeks of the year. If a stock has an IVR of 25, its implied volatility is lower than the 75% of the trading days over the last year. If it’s at 80, that means it’s higher than 80% of the days in the last year. The general rule is that if IVR is under 25, it’s cheap to buy calls or puts. If it’s over 30, I might want to sell calls and puts. If it’s really elevated, that’s the time for me to do exotic trades like [Iron Condors](. This can also tell me which stock to trade, and how to trade it compared to other ideas. Rule 4: Sell Credit Spreads in Negative Momentum If a stock is expensive to short with a long put, there are other “options.” I can sell vertical call spreads on stocks with a high IVR, and benefit if the stock trades sideways or declines in value. I’d be selling someone the right to purchase a stock from me at a higher price. If the stock price falls, the underlying call will fall as well, thereby reducing the value of the call spread. I use a higher call on the trade to protect myself against any surprise upside on a stock — think a buyout or sudden momentum reversal. Rule 5: Look for Oversold Levels on the SPY and IWM Finally, the market tends to sell off fast and furious in negative momentum environments. From June 8, the S&P 500 ETF SPY went from overbought to oversold in about seven trading days. Following the SPY’s move on the Relative Strength Index (RSI) to under 30, the market was oversold. Oddly enough, no one had the guts to buy stocks. Want to know who purchased shares in oversold conditions and made a fortune? Robots. Algorithms — which have no emotion or fear — scooped up stocks in deeply oversold conditions and kept buying for a month. The market’s momentum didn’t turn positive for a month — until July 18 — but low-volume buying produced terrific gains. Rule 6: Wait… Sell Puts in Very Specific Conditions The oversold territory is also a very good place to sell puts on stocks I want to own when we’ve reached a period of “peak fear.” If the RSI on a stock is at 25, and it’s a great blue-chip company, I use the high volatility and the fear to sell puts on a stock maybe 15% to 20% lower than its current level. If the stock does fall to that point, I’ll have an absolute bargain. But if the stock rebounds from overbought, I can repurchase the option for less and pocket the difference. With that, I’m ready for battle. It’s time to trade momentum. [] Chat soon, Garrett {NAME} PS: Now’s the time to focus your attention on the long-term. I know that trading is fun, but we have the chance to make real money on the other side of this financial crisis. So, today, you can take advantage of our final new offer for Tactical Wealth Investor. [Click here to get our two portfolios]( and take advantage of this opportunity before it’s gone forever. The price is ridiculous. I need to talk to someone about that. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [] [] _________________________________________________ [] 22 Hedge Funds Piled Into This ‘Stealth Stock’ Take a look at this screenshot from [my patent-pending software…]( [] What you see here is something I like to call a “Stealth Surge” during the second week in March on AMD… Meaning for the past 33 years, this one week in March has been the most bullish of the year for AMD. Did you know that? Because 22 hedge funds did, and they loaded up! Buying BILLIONS worth of shares right before the Stealth Surge hit this year… And according to my study, if you would have loaded the boat with $2,000 in AMD call options before the second week of March this year… BEFORE the hedge funds piled in. [You Would Have Made Out Like a Bandit!]( [] From 1/3/2023 to 9/6/2023 on closed trade signals, the average win rate is 80%, and the average return per position (winners and losers) is 15.74% with an average hold time of 7 days on the options. [] _______________________________________________ [] Market Momentum is RED Like I mentioned above, momentum has turned red, and I’ve moved to cash. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [] ___________________________________________ [] Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, [click here](. To download to your Android device, [click here](. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, [click here](. To download onto your MacOS, [click here](. 3. Then add the TradingPub channel and you’re done: [9_jjnFuAvno0MjNh]( See you there! Garrett [] [] [] Get Ready: 6 Rules for Negative Momentum Everyone panic! [] As I’ve discussed over the last two weeks, momentum has been bouncing back and forth due to ongoing concerns about global liquidity, collateral quality and seasonality. We had a similar short squeeze last year that ultimately led into a September sell-off. Markets are back under pressure Wednesday. About 70% of public companies are off, 68.5% of all stocks are under their 50-day moving averages, and concerns have elevated that the 10-year bond and interest rates MUST MOVE HIGHER (duh!). Today, we’ve had our momentum readings bounce between neutral and negative. And now, it’s looking like the latter will be the reading heading into Thursday morning hours. You know what that means? It’s time to follow rules. Rule 1: Cash Is Your Friend I move to cash when momentum turns negative. I know that sounds crazy. I sell everything? Well, I don’t sell everything in my retirement account. But my trading account? Yes… I move to heavy cash. I’ve already made that move. I’m mostly out of long positions in options, and I position my cash for buying opportunities. Since I’m an active trader and investor, I focus on key technicals that allow me to look for new entry points. The move to negative momentum is very important, as I protect as much capital on the balance sheet as possible. This is how I can buy for a dollar and sell for two dollars multiple times yearly. Rule 2: Don’t Sell Puts, Unless… See Rule 6 If I find myself selling put spreads as an entry point, now is not the time for me to open new positions… If I sold previous cash-secured puts or put spreads, I entered this with the mindset that I was willing to buy the stock at a lower price. If I’m up on my current position, now would be a good time to take profits. If I’m down, now might be the time to assess whether I want to sell spreads at an even lower price. When momentum goes negative, selling can be indiscriminate. That means nothing is safe. The last thing I would want to do is have exposure to a $50 put when the downside for a stock is much lower. Rule 3: Learn Implied Volatility Rank One of the great rules that I learned from my time with tastytrade and Tom Sosnoff was how to know the difference between cheap options and expensive options. I use a tool on tastyworks called Implied Volatility Rank (IVR). This measures the implied volatility of a stock TODAY compared to its IV during the previous 52 weeks of the year. If a stock has an IVR of 25, its implied volatility is lower than the 75% of the trading days over the last year. If it’s at 80, that means it’s higher than 80% of the days in the last year. The general rule is that if IVR is under 25, it’s cheap to buy calls or puts. If it’s over 30, I might want to sell calls and puts. If it’s really elevated, that’s the time for me to do exotic trades like [Iron Condors](. This can also tell me which stock to trade, and how to trade it compared to other ideas. Rule 4: Sell Credit Spreads in Negative Momentum If a stock is expensive to short with a long put, there are other “options.” I can sell vertical call spreads on stocks with a high IVR, and benefit if the stock trades sideways or declines in value. I’d be selling someone the right to purchase a stock from me at a higher price. If the stock price falls, the underlying call will fall as well, thereby reducing the value of the call spread. I use a higher call on the trade to protect myself against any surprise upside on a stock — think a buyout or sudden momentum reversal. Rule 5: Look for Oversold Levels on the SPY and IWM Finally, the market tends to sell off fast and furious in negative momentum environments. From June 8, the S&P 500 ETF SPY went from overbought to oversold in about seven trading days. Following the SPY’s move on the Relative Strength Index (RSI) to under 30, the market was oversold. Oddly enough, no one had the guts to buy stocks. Want to know who purchased shares in oversold conditions and made a fortune? Robots. Algorithms — which have no emotion or fear — scooped up stocks in deeply oversold conditions and kept buying for a month. The market’s momentum didn’t turn positive for a month — until July 18 — but low-volume buying produced terrific gains. Rule 6: Wait… Sell Puts in Very Specific Conditions The oversold territory is also a very good place to sell puts on stocks I want to own when we’ve reached a period of “peak fear.” If the RSI on a stock is at 25, and it’s a great blue-chip company, I use the high volatility and the fear to sell puts on a stock maybe 15% to 20% lower than its current level. If the stock does fall to that point, I’ll have an absolute bargain. But if the stock rebounds from overbought, I can repurchase the option for less and pocket the difference. With that, I’m ready for battle. It’s time to trade momentum. [] Chat soon, Garrett {NAME} PS: Now’s the time to focus your attention on the long-term. I know that trading is fun, but we have the chance to make real money on the other side of this financial crisis. So, today, you can take advantage of our final new offer for Tactical Wealth Investor. [Click here to get our two portfolios]( and take advantage of this opportunity before it’s gone forever. The price is ridiculous. I need to talk to someone about that. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [] [] _________________________________________________ [] 22 Hedge Funds Piled Into This ‘Stealth Stock’ Take a look at this screenshot from [my patent-pending software…]( [] What you see here is something I like to call a “Stealth Surge” during the second week in March on AMD… Meaning for the past 33 years, this one week in March has been the most bullish of the year for AMD. Did you know that? Because 22 hedge funds did, and they loaded up! Buying BILLIONS worth of shares right before the Stealth Surge hit this year… And according to my study, if you would have loaded the boat with $2,000 in AMD call options before the second week of March this year… BEFORE the hedge funds piled in. [You Would Have Made Out Like a Bandit!]( [] From 1/3/2023 to 9/6/2023 on closed trade signals, the average win rate is 80%, and the average return per position (winners and losers) is 15.74% with an average hold time of 7 days on the options. [] _______________________________________________ [] Market Momentum is RED Like I mentioned above, momentum has turned red, and I’ve moved to cash. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [] ___________________________________________ [] Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, [click here](. To download to your Android device, [click here](. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, [click here](. To download onto your MacOS, [click here](. 3. Then add the TradingPub channel and you’re done: [9_jjnFuAvno0MjNh]( See you there! Garrett [] A TradingPub Publication ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. TradingPub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from TradingPub LLC are for your informational purposes only. Neither TradingPub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. TradingPub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by TradingPub 101 Marketside Ave, Suite 404 PMB 318 Ponte Vedra, Florida 32081, United States [] A TradingPub Publication ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. TradingPub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from TradingPub LLC are for your informational purposes only. Neither TradingPub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. TradingPub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by TradingPub 101 Marketside Ave, Suite 404 PMB 318 Ponte Vedra, Florida 32081, United States