TradePRO Strategies


Still very typical action here. We are only going to get some edge if the markets start to chop sideways or down, which could happen at any moment. Otherwise, I have these trades neutralized very well so that the DD will just float at these levels - thus it’s completely normal. Take a very good look at the VIX here. Do you think it will trade down towards $8 moving into December? If YES - we are likely to come out break even or marginally up, but that is just highly unlikely. It would indeed be a historical low never seen before, ever. It is still possible, just unlikely. Here’s what I am going to be doing moving into the big expiration we have mid month here. After this week, some of these bad hedges will clear off and my look forward balance will improve on the system. I will be opening up new VXX shorts in the form of puts to help further with decay and provide some edge, in the event the VIX actually does drop towards $8 - this at least ensures we will make some profits moving into December. Additionally, we will be slowly adding to our March call position so that we can collect income on a weekly basis, whereas I have to use the December core call position to collect some really big bulk trades here a couple more times on a bi-weekly basis. It’s a good plan. Even if the VIX does move into $8 towards December, come March it gets even more unlikely it can sustain below $10 thus coming back into that level. I know this might be a lot to grasp - just continue to understand this is business-as-usual. Now… in the event the market start to chop here, and pops remotely close to $11 on the VIX will give us massive edge. It only takes just that, and I can close down a 10-20% month on this system. However, I can’t control the market. It may just be that we float 1-5% per month for now, and the first month could be the wild card drawdown month, since I took on some initial drawdown just executing the large bulk call trade at $10 - which we had to do based on the data. Keep in mind this is a personal journal for me now. We are still witnessing history in the making in regards to volatility, so I will probably continue to talk about it… a lot. Remember the moves are convered and dual hedged, meaning buy stops will trigger on the VXX and options in the event volatility spikes - giving us extra protection, and potentially even more edge if our boundaries remain respected. Hang tight, this is just normal procedure.


It does look like the Nasdaq has commenced a cyclical melt-up-higher phase where pullbacks will remain shallow. The 6200 level is the next major barrier, and with this type of price action, it could happen this month. We are yet again spread, when the signals come in - I will shed the future shorts and allow the longs to ride. Here’s the issue - those signals might not come in! However, we can depend on our option and stock plays to make up for the potential miss on this leg. I have begun building TQQQ longs and QQQ call option longs, there’s absolutely no reason to rush anything here or give back profits on the week. I would have allowed the longs to sit without the shorts on, but it’s standard procedure for me to keep the trade hedged moving into a big data day - like tomorrow. This time around, it does look like the market has moved before the news. NFP really would have to be terrible to put a dent into these flows. Yes, the markets are going higher! Tread carefully…

Markets closed…

We’ve hit the sweet spot, and this will continue. Most notable today I believe is technology but everything is quite bullish. There’s nothing stopping this move here. I continue to note Apple relative weakness. If/when Apple participates we are only going to see the Nasdaq get stronger. For now, there is considerable income opportunity getting long Apple, which I have done in the #OptionsPRO account. I expect another melt up phase here.

Markets open…

Today is a great example of how data can only be a volatiliy catalyst, and nothing more. NFP numbers missed badly, typical logic here = Bearish USD and Bullish Gold etc. however we are seeing the opposite. This has just created an artificial dip in equities here. Noteable this morning is CRM / NFLX / and PYPL were strong among relative weakness in the sector. Again, today is worth remembering. Sometimes where the markets sit is more important than the data punch. Any bad number whatsoever would’ve resulted in a knee jerk reaction lower with equities and volatility standing where they were - before the data release.


This is what we wanted today for this system. Volatility was slightly bid this AM leaving us more room for possibility that the the December contrats will retain their value into mid month here while our short position hopefully goes to zero.


I have added an additional contract long NQ / QQQ options / and TQQQ. We still cannot shave the short contracts off until I have all the signals that tell me to do so. It’s still possible we can dump those at a lower price. Alternatively, there are sell stop hedges to add to the position, since we have also added long.


No changes.


Gold has been counter hedged now, it should be going lower. We have added a bit to NFLX long and also opened up a TQQQ long position on this system.


Still excellent action for what we need here. Moving into the weekend will be long VXX but will shave those off come Monday and look to play directional puts to the downside. I think we will close below $38.00 / lets see.

Markets closed…

I am always a little uneasy when the NASDAQ - NDAQ - sells off like this. It’s down 5% on the day, and I still need to research a bit more on the potential catalysts. Aside that, markets behaved as I expected today, nothing!


Happy with the performance this week. Ofcourse, hindsight is 20/20 and I wish we had cut the shorts earlier and allow the longs to run, but I remained protected moving into all the data events. I am perfectly fine with this.


We couldn’t have performed better aside a anomoly in our hedges triggering this week:

Otherwise, performance was perfect and in line with expectations.


Overall, fairly normal. Even if I were try and find mistakes this week, they would have only cost roughly $500 thus not even close to contributing to the drawdown. We are simply trading through expense fees at this point. I really, really still like the volatility trades and think they are going to end up paying handsomely.


It’s been a boring week. We went neutral on Gold here, and will watch it further.

All programs have gone hedged into the weekend. Any orders you find coming in at the last minute are hedges.

I hope everyone had a good week. It’s time for me to reflect, and enjoy the weekend. My girlfriend and I will be visiting the mountains for a football game. The weather is perfect and autumn is in the air - time to relax.

Take care.


Markets open…

It’s quiet, very quiet, all on the western front. Over the weekend…

The greed index is through the roof… but this doesn’t mean markets won’t continue melting up, because this is exactly when they do that. Volatility is still quite the topic, marking the historical all time low last Thursday! Additionally, last week marked an important event - showing volatility future spec holdings surpassing the actual index. Dangerous? Probably… but this danger will just be unannounced, for now it’s going to remain very slow.

This week will be about about bank earnings, kicking off this Wednesday. XLF is bullish - and I doubt any potential dissapointing earnings will stop the general flow. Likely, if the banks do drop - these will be buying opportunities. Data wise the week is really boring. We have FED minutes on Wednesday, Unemployment Claims on Thursday, and some CPI data on Friday. The market will probably ingore all of these. Occassionaly, Fed minutes can suprirsingly jolt the markets, so I will leave this on the table as a wild card.

Other than that, prepare for a snooze fest.


Expect to watch those march contracts held for at least more than a week, unless volatility comes back. Between then expect a lot of NQZ7 shorts. We are willing to take on a .05% drawdown by leveraging lighter on the short side, so that should be expected if markets turn lower.


Things look good. There will be no activity on the account until mid month, or if the VIX starts moving higher - you will see the system trigger some long positions. If volatility keeps doing this, we will have a nice payout mid month, and then I will be setting another large order up for the week after that.


I like where it stands. Netflix will be the big watcher into earnings next week. We have recovered fine from the Apple situation explained in the last post. BABA continues to be a great spread, we are will continue to open those trades on a weekly basis.


We traded NVDA this morning and have opened up a long S&P position… I am also still spread Gold, and have opened up a crude oil long. We will be adding size as the trade works itself out. Could be possible we have to spread crude for more downside if that happens.

Have a great day.

And I figured this out… before the weekend it was leaked that BofA etc. would downgrade the stock. That’s wall street for you! I haven’t looked at the insider reports yet but it also doesn’t matter. Word gets around…


Currently I am looking to add another contract long, which we will spread into. However, it’s possible we could continue to take on a drawdown here, with smaller hedges kicking in via the options market - primarily. This is a critical level for the Nasdaq in what looks like selling before the next wave higher. I am okay with another 1-2% drawdown with hedges included here. The issue traders have in areas like this, is that they overhedge, and then find themselves neutralizing trades at the lows, which means there’s no way to make money in that respect. For this system to work properly, intraday drawdowns sometimes are taken.


Volatility futures are correctly mapping with C2 again. We are entering into the “sweet spot” for this system. If the VIX ranges between $9-11 during this month, there will be a string of 1-3 very large wins in relevance to our core position. It’s hard to say right now how it will turn out, but I suspect we close the month out 3-5% in positive territory.

Programs are running smoothly.


I have added some uncovered risk to the VIX program, however it is covered into the close, and covered intraday on volatility spikes - but still technically, for brief periods of time, uncovered. Please ensure there are no margin limitations or issues on your end. You should have 50 contracts now on the short VIX position there.

Following futures positions of non-commercials are as of Oct 10, 2017.

10-year note: Currently net long 192.6k, down 39.6k.

Market participants constantly rerate expectations. They have to. The related variables are dynamic and constantly changing themselves.

The nimble ones are quick on the trigger. The slow ones sometimes can have their head handed to them.

Just the nature of things.

Back in 2000, U.S. stocks posted a major peak in March. Hindsight is always 20/20, but those who bought in late ’99 or early ’00 probably did not think they would essentially become the proverbial greater fools. Ditto with another major peak in U.S. stocks in October 2007.

Or, take the low in 10-year Treasury yields in July last year. Yields bottomed at 1.34 percent back then – successfully testing the lows of four years earlier. Many thought – yours truly included – rates were still headed lower. Those who failed to react quickly to changing sentiment got hurt. TLT (iShares 20+ year Treasury bond ETF) has shed nearly 10 percent since.

In this context, what is going on in the fed funds futures market is apropos here.

Just a month ago, traders gave scant odds for a 25-basis-point hike in the December meeting. Now, it is almost a lock, although the odds dropped from 92 percent last week to 82 percent this week. The FOMC minutes for the September 19-20 meeting released this week pretty much confirmed that a hike was imminent. Traders adjusted quickly, as FOMC members began jawboning strongly.

The lesson in all this is that it is never a good idea staying wedded to a position, particularly if – as is the case with U.S. stocks currently – investor sentiment is effusive, valuations are elevated and have had a great run.

30-year bond: Currently net long 27.6k, up 12.8k.

Major economic releases next week are as follows.

Tuesday brings industrial production (September), the NAHB housing market index (October), and the Treasury International Capital (August).

U.S. capacity utilization rose 0.4 percent month-over-month in August to 76.1 percent. This was the sixth straight up month following 24 down months out of 25. Utilization peaked at 79.2 percent in November 2014.

Home builder sentiment in September dropped three points m/m to 64. March’s 71 was the highest since June 2005.

In the first seven months this year, foreigners net-purchased $45.5 billion in U.S. equities. On a 12-month rolling total basis, January-July purchases totaled $58.7 billion – down from $94.3 billion in June, but the trend is up. In February last year, they net-sold a record $142 billion.

September’s housing starts are due out Wednesday. August fell 0.8 percent m/m to a seasonally adjusted annual rate of 1.18 million units. The cycle high of 1.33 million – the highest since August 2007 – was reached last October.

Existing home sales for September are published Friday. Sales in August fell 1.7 percent m/m to 5.35 million units (SAAR). March’s 5.7 million units were the highest since February 2007.

Crude oil: Currently net long 435.6k, down 15.4k.

After losing the 200-day moving average but finding support at the 50-day ($49.23/barrel) last Friday, spot West Texas Intermediate crude ($51.45) started the week by reclaiming the former.

Near term, there is room for continued rally toward $52-$53.

That said, if weekly overbought conditions prevail, it is likely the 50- and 200-day get tested again. Merely $0.32 separate the two. Right around there lies a rising trend line from June this year – a must-hold for the bulls.

For the week ended October 6, the EIA report showed US crude stocks continued to drop, down 2.7 million barrels to a six-week low of 462.2 million barrels.

Distillate stocks dropped as well – down 1.5 million barrels to 134 million barrels. This is the lowest since June 2015.

Gasoline stocks, on the other hand, rose 2.5 million barrels to 221.4 million barrels – a five-week high.

Crude production decreased 81,000 barrels/day to 9.48 million b/d. The prior week was a 26-month high.

Crude imports, however, rose 403,000 b/d to 7.62 mb/d – a six-week high.

Refinery utilization rose 1.1 points to 89.2 percent. Pre-Harvey, utilization peaked at 96.6 percent and bottomed at 77.7 percent in the aftermath of the hurricane.

E-mini S&P 500: Currently net long 140.5k, up 39k.

U.S.-based equity funds in the week to Wednesday pulled in $2.9 billion (courtesy of Lipper).

In the same week, a total of $319 million moved into three S&P 500-focused ETF’s, with SPY (SPDR S&P 500 ETF) losing $892 million, and VOO (Vanguard S&P 500 ETF) and IVV (iShares core S&P 500 ETF) attracting $71 million and $1.1 billion, respectively (courtesy of

In a doji week, the cash managed a 0.15-percent rise, with some signs of fatigue beginning to show up. Yet, as overbought as it is, the index has not tested the 10-day in the last 11 sessions.

Besides the 10- and 20-day, the first layer of support lies at 2509, which it broke out of two weeks ago.

In the meantime, the ratio of Investors Intelligence bulls to bears this week posted four – a rare reading. This was the 16th such occurrence going back four years. If past is prologue, this can mark at least a short-term peak in stocks.

Euro: Currently net long 98.1k, up 7.2k.

On Tuesday, Catalan did not immediately push ahead with independence from Spain. This set in motion a relief rally in the cash ($118.21).

But the issue is far from resolved. Mariano Rajoy, Spanish prime minister, has given the Catalan government until Monday to clarify whether or not it has declared independence. He has the option of invoking article 155 to suspend Catalan’s autonomy.

During all this, the euro, after finding support at the daily lower Bollinger band last Friday, rallied this week, but only to face resistance at the 50-day ($118.44), which also represents short-term horizontal resistance.

Gold: Currently net long 200.1k, down 3.7k.

Going back seven years, $1,300/ounce on the cash has been a level where the bulls and bears have consistently fought a tug of war. Most recently, the metal ($1,304.60) broke out late August, fell back under it a month later, only to recapture it this week. The 50-day lies at $1,300.71.

There is room to rally on the daily chart.

Flows probably need to improve.

In the week through Wednesday, IAU (iShares gold trust) lost $37 million, while GLD (SPDR gold ETF) was essentially flat (courtesy of

Nasdaq 100 index (mini): Currently net long 30.1k, up 872.

On Thursday last week, the cash (6092.45) broke out of nearly two-and-a-half-month resistance at 6000. This likely prompted flows into QQQ (PowerShares QQQ trust), which during the week ended Wednesday this week took in $473 million, reversing outflows of $1.4 billion in the prior two (courtesy of

The index arguably has poked its head out of a rising four-month wedge. A convincing breakout can potentially cause short squeeze, as short interest on XLK (SPDR technology ETF) in particular remains elevated.

Russell 2000 mini-index: Currently net long 12.9k, up 17.4k.

The cash (1502.66) is sending out signs of fatigue, with sideways-to-slightly-down action in the past nine sessions. The bulls hope this ends up acting as a flag, but may not turn out that way. At least near term, the path of least resistance is probably down.

The risk facing the bulls is this. The Russell 2000 rallied 12-percent-plus since reaching an intraday low on August 18. Non-commercials lent a big helping hand.

As the index proceeds to unwind overbought conditions, the bulls can get tempted to lock in gains.

In the week to Wednesday, IWM (iShares Russell 2000 ETF) and IJR (iShares core S&P small-cap ETF) combined lost $110 million – the first outflows from these ETF’s in the past four weeks (courtesy of

US Dollar Index: Currently net short 3.7k, up 402.

Near-term resistance at 94 held on the cash (92.93). As did broken-resistance-turned-support at 92.50-60.

Daily indicators have reached the median. If there has been a real change in sentiment toward the greenback, the bulls should be able to defend this support. The 50-day lies at 92.77.

Except, non-commercials continue to remain in wait-and-see mode.

VIX: Currently net short 174.7k, up 4k.

Daily Bollinger bands on the cash continue to narrow, with the upper bound having provided resistance several times in the week. In the meantime, the 10- and 20-day are converging, even as the 50- and 200-day are flattish.

This is an opportunity for volatility bulls. Remains to be seen if they can cash in. Non-commercials are net short VIX futures up to their eyeballs – record this week – and, if squeezed, can provide a huge tailwind to the cash.

Thanks for reading!


Here’s what to expect this week…

I have neutralized the NQ futures positions here. I am pricing in a downturn in the Nasdaq soon, however we think this week could remain quiet - so we have decided to get in on the premium game.

We are 4 long NQ and 4 short = very little actual margin use. We won’t be shedding the futures positions until we are clear of this weeks options positions, which could be at the end of the week - it all depends. We will, however, add to the SHORT side of this position in overnight trading if it is necessary to hedge our option plays.Currently I am looking at QQQ 29 DEC calls to sell some oct20 covered calls around the 150 barrier to expire this week.

Here’s what you need to know regarding margin:


Roughly $8K will be taken up tomorrow on the long calls. Intraday we could throw around $50,000 worth of SQQQ to hedge, but it will be alongside options hedges. This is because we will close the stock positions out before the close, and maintain the option hedges if we need to - a smart use of the margin. If you are already scaling the strategy, there is really nothing to worry about.

On the futures side, again, we are neutral for a reason until we are clear of these new plays.

Collective2 says I am currently using $50K worth of margin, but this is hugely incorrect. Since we are neutral with different contracts, in reality it’s less than $1K of margin in active use. This will change if I add another 1-2 contracts short during this period, but not by much - i.e. roughly $14K in additional margin.

In short, I expect to use anywhere from $8K-35K worth of margin to be carried off active hours moving forward here and potentially as high as $50K worth of intraday margin to be implemented if the SQQQ hedges kick in.

Those last two sentences are the important part.

Have a great day.


I am currently reviewing the rates market for the next trades. TBT and TLT primarily for this account… will likely be looking for a long TBT position shortly, but will be waiting on some signals first.


I do have strong signals today that volatility has carved out some type of base. This is the first time I have had these signals in about two weeks. I am pricing in a VXX move to roughly 36 in the coming 5 trading days. This is good news for the system, and I will post updates on any important executions.

I have been modeling XIV in periods of very low volatiity (like the last week). Two of my indicators gave reason for caution for the rest of the week.

Agreed. However, overnight markets are still surprising me. VXX 34.50 will prove an interesting barrier, the most interesting we have seen in two weeks, outside of that - who knows.

Unbelievable market strength this morning - surprise!

As noted two days ago, we are not surprised the markets have sold off for mysterious reasons. I have also been starting threads warning people about volatility - of course only to be attacked and berated the entire time. That’s okay!

Well… not so mysterious reasons today.

Today marks the 30th anniversary of Black Monday. The news wires are also trying to blame spain tensions, China GDP growth at 6.8% or earnings disappointment, but those are just the usual finger pointing that means absolutely nothing. The reason for this is superstitious, many traders pay attention to things like this, the ones higher up even pay attention to astrology. You won’t hear that report in the news! Volatility signals two days ago simply pointed to the buyers coming in to hedge their portfolios.

Here’s what to expect.


This will actually be our best performing program today. I knew it was possible that the VIX would pop - so we initiated our new short positions 100% covered with the new barrier @ 12 versus @ 11 as we had last week - this was a great move as the VIX is currently trading @ 11.33 - We were also long 150 VXX contracts into the close, thus we are over covered at this time. I am likely to add more to the position uncovered, which will move into covered mode into the close, or on an intraday basis depending on fills. This may or may not happen today - further activity.


Expect 1-2% drawdown here.

Our Nasdaq futures hedges triggered in a not so perfect zone today and I cut them for a loss this AM. However, what if the market did melt down? That order would have pinned the DD @ 2% where it would have stopped and others would have blown up. This is worth the insurance, however ideally in hindsight the order would’ve worked best triggering around 6090 but we are currently trading now at 6085 - so this was a tight level. The point is - the program was hedged for this type of event, and today we paid a small fee to ensure your account doesn’t blow up.

Here’s what to expect trade wise.

I will be initiating a bull put spread on the QQQ 147 barrier expiring end of week because I already have signals this sell off has shown signs of reversing. More than likely - this turns into a BUY THE F* DIP montage as we all have heard this screamed out for the past 4 years. BTFD. Yes, days like today freak people out, but more than likely, funds buy this. This is not real selling, it’s just real selling based on what we have seen the past two months. When the trade expires I will consider getting long NQ futures / and or continuing to sell premium on the QQQ call position. We are closing out the SQQQ hedges and DEC 147 puts here. We could’ve bought more SQQQ into the close, I will consider that an error on my end.


Expect 1-3% drawdown here.

Most of the options barriers this week should expire worthless, I think Alibaba will hold and pay off nicely. I may close out all covered call positions here for a profit. NFLX and APPL will weigh down the portfolio, however I will be adding intraday hedges that will trigger puts if the market melts down. There is no way on an options program like this can not take on a drawdown on days like today, it’s just the extent of that drawdown that matters. This should be the worst performing program today.

With that said… traders needed a day like today badly, I am looking at my signals now and I do believe this sell off is contained, that’s not to say it won’t change, but it does look this way right now. If the market behaves orderly at these levels, it opens up significant opportunity for me next week and to close out the month.

I will be very very busy today and cannot answer questions in PM unless from current subscribers.

My programs are free, and they come with constant communication and hedging.

Please be safe today and do know that it’s a good day to evaluate your traders. 1-5% DDs on a morning like this are reasonable depending on the program, beyond that is not reasonable. A median DD on a day like today of about 2.5% would be ideal, especially if you notice the trader had hedges on, whether they won or lost ,doesn’t matter, they should have had something trigger overnight if they also use futures. Consider your open risk and evaluate the programs. If you would like an opinion on a program and their activity today, feel free to send the information over.