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Stocks are on a four-day winning streak this week – but look closer, and you'll see the Russell 2000's small caps are slipping into a seasonal "danger zone" (queue the Kenny Loggins tune).
That's why in this week's edition of Fast Profits with Money Morning, I'm targeting this small-cap move for a quick payday for you.
The small caps are telling us what the rest of the market is about to do, as we're heading into a historically low period of the year for stocks. After the early to mid-July earnings excitement dies down, a summer slowdown hits, typically until October. Small caps tend to fall first (I'll tell you why in today's video).
It's a classic seasonal trend – a healthy market adjustment that happens every year. And now that you know it's coming, you can profit from it with one easy trade. I'll show you in today's Fast Profits:
Action to take No. 1: Buy shares of ProShares UltraPro Short Russell 2000 (NYSE: SRTY) using a limit order of $10.
Action to take No. 2: Buy to open IWM, Nov. 20, 2020 $140 puts (IWM201120P00140000) using a limit order of $9.60.
As we continued digging deeper into Q2 earnings, I'll be continuing to publish more "Fast Profits" opportunities to help you make the most of every market event… or to help save you from disaster, should things take an unexpected turn.
And trust that there's no one better suited to guide you through these uncharted waters. I've been in the financial industry for decades, helping individuals build their wealth even in down markets.
In fact, just last month, shortly following a sharp downward retracement, costing the S&P 500 more than 200 points in three days, one of my Night Traders said:
"I had a goal – to make enough profit in trades this week to rent an RV and take my family on a two-week trip to visit Yellowstone and Mount Rushmore this Summer. And with eight winners in a row, I have reached that goal. The RV rental is now paid for!"
And now with me behind the wheel of your trading picks, you too could be on track toward making your goals a reality.
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Strikepoint Trader and contributes to Money Morning as the Quant Analysis Specialist.