Dear Reader,

Today’s small-range upward move fits the profile for the morning-after trade, like the market got hungover during the weekend.

Okay, let me explain what I mean by that.

The S&P 500 (SPX) climbed 2.4%. It’s a big change for that index. In fact, that size of an upward move has happened only a couple dozen times over the past 25 years.

These moves tend to come in clusters. When there is a long break between them, their reappearance usually spells trouble.

It’s like falling off the wagon. The aftermath is not pretty, but at first things seem like fun.

I don’t know if this is going to be an isolated event, or if this is just a signal for more trouble ahead. But either way I’m ready because I’m betting the volatility won’t quit. And that will offer us amazing trades.

Just like the trade on Petróleo Brasileiro (PBR) that allowed us to close out the first half today for 100% gains. These trades have been coming fast and furious for the past month. You should see the track record!

This week I’ll be in Chicago with my fellow traders including Mark Sebastian (who just went 11/12) in the past month. We’re going to be sending out some very hot trades along with high-value, real-time education. You won’t want to miss out!

Talk soon,

Chris Johnson
Quantitative Specialist, Penny Hawk


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