OK, if you followed along with yesterday’s BONUS TRADE update, then you likely grabbed shares of the Direxion Daily S&P 500 3X Bull ETF (NYSEArca: SPXL).
Assuming you were following directions, you would have snagged one-fourth of your position around $123/share at the open this morning, one-fourth at a limit order of $120.77, and one-fourth at a limit order of $119.07 per share.
That averages out to be $120.95 per share versus a closing price of $119.02.
There should still be a limit order of one-fourth the overall position left to be filled at $117.77, which would average us in right around $120.
Let’s cancel that order now, so that we have some time to see whether we can set it down into the low $116-117 range and lower our average entry even further.
I will be sure to include an updated limit order in Monday’s weekly outlook…keep an eye on your inboxes for that.
Don’t worry, though. If your account drew down today, you’re not alone. Darn near everything was in the red.
Source: Finviz
Track Vital Market Trends With the 3 V’s
But remember my method…always check volume, volatility, and the volatility of volatility.
Three easy pitches that can tell us whether or not our position is set to hit a line drive up the middle, or whether it’s going to strike out.
Our first vital market trend, overall volume, did increase a bit, but not above last month’s peaks, as per this chart in the bottom right corner.
Source: Bloomberg
Strike one.
So what about the second vital market trend? Is volatility breaking out above previous levels?
Source: Bloomberg
Nope…strike two.
What about the volatility of volatility?
Source: Bloomberg
Strike three… our last vital market trends shows us everything is fine.
Just FYI we might see some more volatility next week.
But as long as it doesn’t break previous trends, all is fine.
One thing that didn’t go down today was gasoline, which rocketed back up to meet last week’s levels.
Source: Bloomberg
But notice how it’s still languishing in the lower part of its recent range.
We have one more Hurricane Ida-related EIA storage report coming out next Wednesday.
I expect it to be bullish for gasoline prices as 70-75% of Gulf of Mexico refineries and oil wells remain offline at this point.
And that means that any gasoline that needs delivered to consumers will be pulled out of storage.
When the market realizes that, expect gasoline prices – and our stake in the United States Gasoline Fund (NYSEArca: UGA) to rise accordingly.
We’ll revisit both that position and our stake in the iShares Home Construction ETF (NYSEArca: ITB) next week.
In the meantime, here’s this week’s watchlist performance.
Source: Bloomberg
Keep your head on a swivel, folks… next week should prove to be just as interesting.
All the best,
Matt Warder
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