These Rapid-Fire Trades Could Turn to Profits in Five Days or Less

To call the markets “volatile” right now would be an understatement.

They’re more like the “Batman” rollercoaster at Six Flags – a 50-mile-per-hour free-fly ride that’s been known to make riders blackout due to its sheer speed on inverted loops.

After reaching an all-time high of 3,393.52 on February 19, investors blinked – and boom, the S&P was down a whopping 18% in just seven trading days.

But then, the ride took a quick swing back up with an 8% bounce on March 2:

A close up of a map Description automatically generated
Then, Wednesday, March 4 saw a 4% jump after Joe Biden’s Super Tuesday win – only to have the major indices open 2% lower the next day.

Feels like the fast up-and-downs of a rollercoaster, right? The kind that makes your stomach squirm. And the ride is far from over…

On March 3, the Federal Reserve slashed interest rates by 50 basis points, its largest cut since the 2008 financial crisis. The simple fact that the Fed feels the need to cut rates at all means that there’s only more volatility to come.

But while most investors suffer from the market’s whiplash, those “in the know” are enjoying the ride, snagging fast profits right under their noses.

In fact, this group of readers just had the chance to score a 50% profit in three days. To learn how you can join them, click here.

All it takes is perfect timing and fast-moving trades – and I’m here today to show you exactly how you can achieve both.

Here’s how to snag a fast profit before this market rollercoaster’s next blackout…

Use Weeklies to Bank Fast Cash off the Market’s Extreme Volatility

In the midst of all of this volatility, my Weekly Cash Clock readers just closed out a three-day trade on the SPDR S&P 500 ETF (NYSE: SPY) for a 50% profit. But they didn’t do it by riding the market’s headlines – they did it by nailing down the exact right time to enter a trade.

Timing is key in this market. And one of the best ways to pinpoint the right time to enter a trade is by using something called channel collisions. By identifying long-, medium-, and short-term trading channels, you can easily spot when a stock is ready to turn and make a quick move.

The chart below on the SPY identifies long-term (pink), medium-term (green), and short-term (blue) channels. The bottom lines of the channels are support. The upper lines are resistance. Notice how the support lines of all three channels collided on February 27, 2020, suggesting a bounce – and signaling a bullish move.

During this volatile market movement, most investors were in a panic, taking their money out of the market as fast as possible. But my Weekly Cash Clock readers followed the bullish signal from this chart and took a trade on the SPY.

On February 27, 2020, we created a Green Loophole Trade, also known as a call debit spread, by purchasing a March 6, 2020 $303 call while simultaneously selling a March 6, 2020 $305 call.

Now, when volatility is high, it pushes options prices through the roof. Simply purchasing the $303 call would have run you $8.83, or $883 for one contract – which is much higher than our $500 limit.

But by simultaneously selling the $305 call, we made a credit of $7.85, or $785 for one contract. If we add that to the $883 debit, then readers only spent $0.98, or $98 to open the trade.

The SPY did as expected and bounced 8% on March 2, allowing readers to close their trade out for $1.48 – snagging a three trading-day profit of more than 50% while others were licking their wounds!

Now, profiting 50% when the market rose only 8% doesn’t just require any old option. To be more precise, it requires weekly options.

We know that options minimize risk and maximize returns. Longer-term (30-60 day) options will typically increase returns by 10-fold – but shorter-term options, like the ones my Weekly Cash Clock readers trade, produce even greater returns.

Think of weekly options as a Formula 1 race car and longer-term options as a tractor-trailer. In a race, the Formula 1 race car would smoke the tractor-trailer. But with a much smaller gas tank, the race car would not be able to travel as far as the tractor-trailer.

In a short race, the Formula 1 race car is the clear choice. The same thing applies to options. If you’re only going to be in for a few days, weekly options will greatly outperform longer-term options. The problem is that they run out of gas (time value) faster, so timing the entry must be impeccable to profit.

At Weekly Cash Clock, we routinely generate short-term profits just like we did with SPY. This year alone, we’ve already taken seven sets of profits, six of which were for 50% gains or more!

While the market continues on this rollercoaster of volatility, weekly options just like this one could be your best bet. To learn how you can receive a new trade recommendation every week, click here.

Good trading,

Tom Gentile

America’s #1 Pattern Trader

Leave a Comment

View this page online: