Just when we thought we were done with 2020… we got 2020 2.0.
I’m talking about the Delta variant, of course – the new, more contagious, twice as infectious strain of COVID-19 that now makes up 83% of new cases in the U.S.
To be clear, nobody knows if COVID-19 will return to 2020 peak levels. However, even the prospect of things getting worse before they get better again is enough to move the markets.
We already have proof of that.
On July 8, 2021, Japan issued a national state of emergency in Tokyo to span through the completion of the Olympics due to a surge in COVID-19 cases. The S&P 500 dropped 1.5%+ in response.
Last Friday and this Monday saw the S&P 500 drop 3% with COVID-19 surge news.
Tuesday, the S&P 500 bounced with a rise in bond yields.
The markets are jumpy – and any further negative Delta variant news will likely drop them.
That means a lot of volatility. And volatility spells opportunity for us.
Here’s a fast-moving “Delta” play that could make you 500% in the next month…
How We’ll Make Big Money Out of History Repeating Itself This Year
The Worldometer chart below illustrates clearly that global COVID-19 cases are beginning to surge again.
worldometers.info/coronavirus/
Last time this happened, we saw a sharp inverse effect in the markets.
You only have to look back to February of 2020 to find it.
When COVID-19 first took hold of the markets, the S&P 500 tanked a whopping 35% from 3,386 to 2,191 in about a month.
Sectors that got hammered in 2020 included airlines, hotels, cruise lines, and oil companies.
Stocks in these sectors have been dropping… again… with the rise in COVID-19 Delta variant cases. Here’s a quick list:
- Delta Air Lines (NYSE:DAL)
- Southwest Airlines (NYSE:LUV)
- Marriott (NasdaqGS:MAR)
- Royal Caribbean (NYSE:RCL)
- Diamondback Energy (NasdaqGS:FANG)
Should COVID-19 cases continue to rise, they will likely drop further.
We’re also likely to see a repeat rise in “stay-at-home” stocks – the tech and online companies that kept us all sane during lockdown last year.
Online shopping giant, Amazon (NasdaqGS:AMZN), shook off lockdowns and soared as people hit the net to buy stuff – a lot of it discretionary. Zoom Video Communications (NasdaqGS:ZM) did the same thing as businesspeople went online to conduct meetings. Apple (NasdaqGS:AAPL) and Microsoft (NasdaqGS:MSFT) skyrocketed during the 2020 pandemic as people equipped themselves to operate their lives online.
Each of these stocks has been on the rise recently and will likely continue to do so if COVID-19 cases continue to spike.
There are many more stocks in each of these sectors that are likely to move as they did in 2020 if the Delta variant takes hold and drives us all back indoors – so do your homework.
What’s different this time is that we have vaccines to interrupt the spread. So the S&P is less likely to tank 35% this time.
That said, simply the threat of a repeat performance of 2020 should drive some downward volatility… and some profits for us.
The Quickest Way to Get That 500% Return This Month
The simplest way to profit on a potential drop in the S&P 500 is to buy puts on the SPDR S&P 500 ETF (NYSEArca:SPY).
Buy 30- to 60-day out-of-the-money (OTM) puts.
For example, right now with the SPY trading at $430, the SPY August 23, 2021, $420 Puts would cost you $4.90 per contract – or $490. If the S&P 500 were to drop 10% over the next month, these same puts would be worth approximately $30 – a 500% return.
If you want to give yourself more time, buy options that expire further out in time.
Of course, this is only one of many ways my scanners are lining up quick profits this month.
Since we are right in the middle of earnings season, it is not uncommon for massive speculative surges to emerge before or after certain announcements.
And every year, I watch as people make the same mistakes, buying “the news” only to be let down.
With so many new, inexperienced traders flooding the markets over the last year and a half, it should come as no surprise that the dumb money is running wild.
An uptick of this scale in trading volume brings new opportunities like we haven’t seen before.
That’s why my team and I came up with an all-new algorithm to track complex market surges before they strike.
I call it BRUTUS.
And our backtesting showed it’s capable of spotting powerful signals that can produce gains like:
- Mitek – 650% gain in just eight days…
- Dril-Quip – 331% gain in nine days, and…
- PennyMac Financial – 300% in just three days.
For perspective, that means a simple $1,000 trade in PennyMac Financial could have turned into $4,000 in just three days.
That’s certainly not an opportunity you’d want to miss…
That’s why BRUTUS is on standby – armed and ready to go anytime speculators make a quick dash into a position.
And I’d like to show you more about how it works – just click right here.
Until next time,
Tom Gentile
America’s #1 Pattern Trader, Power Profit Trades
