Dow Jones: How I Made 100% From Last Week’s Breakdown
Last week, the Dow Jones Industrial Average fell over 3%. It was the index’s worst week since October.
But thanks to Mike Carr, I knew exactly what was coming — and was actually able to profit from it.
And this gets down to the entire reason we publish True Options Masters — so YOU can start benefiting from their mastery just like I have.
On May 24, Mike published his weekly One Trade outlook. He shared a couple charts noting a series of lower highs and lower lows. This suggested the start of a technical breakdown in the market.
But what really got my attention was his proprietary algorithm that predicts the Dow’s direction two weeks out…
I was so convinced by what it showed, I took action. And it paid off handsomely…
So today, I’ll show you how I took advantage of Mike’s signal.
You’ll learn how easy it is to profit with such a simple strategy. And how, even when a trade doesn’t work out immediately, staying true to your convictions can pay dividends…
Mike’s “Crystal Ball”
In One Trade, Mike uses a Volatility Watch indicator that he invented to track the market’s direction.
It uses recent market volatility to project the Dow’s general trend over the next two weeks.
I absolutely love it and it’s become one of my personal favorite tools for tracking the market.
When Mike first started using this indicator, he back tested it over 100 years of market data. And what he found was incredible…
Mike’s signal would have alerted you to Black Monday in 1929, the cataclysmic drop in stocks that took 25 years to recover, two weeks in advance.
It also would have called the top in stocks in 2000 … and given you the all-clear to jump back into the market in March 2009, right near the bottom of the Great Recession.
Now, were these calls precise to the day, hour, minute? Of course not.
But they don’t need to be.
Mike’s indicator shows you when markets are about to MOVE. Whether that takes a few extra days or not doesn’t make much difference with the right trade (more on that in a bit).
It’s an invaluable tool for any trader. Almost like having a crystal ball.
So you can imagine… When I looked at Mike’s indicator and it was forecasting an 8% drop in the Dow over the next two weeks, I took action.
Here’s the chart Mike showed his One Trade subscribers on May 24…
The black candlesticks are the Dow’s price action, and the green line is Mike’s Volatility Watch indicator, which projects the Dow’s move two weeks ahead.
It showed that DIA, the Dow exchange-traded fund, was likely going to fall from about $348 to $320, and then rebound to around $338, in the next two weeks.
You may notice the lines don’t match perfectly, which is fine. Mike’s indicator isn’t meant to be 100% accurate with the price action. What it IS meant to do is consistently forecast a near-term change in direction, and it does an incredible job.
Just look what I was able to do with this tiny little bit of information…
From 60% Loss to 100% Gain…
When I saw Mike’s One Trade update, I immediately purchased the $335 put options on DIA that were set to expire by the end of June. (Mike’s indicator said two weeks, but I wanted to give the trade time to play out. So I gave it a full month.)
I should mention, this trade was separate from the weekly trades Mike recommends. And frankly, he almost never recommends trades that expire a month later because the time decay on options premiums is so massive. (As a reminder, options rapidly lose value as they approach their expiration date. That’s what I mean by “time decay.”)
However, I knew a potential 8% drop would more than make up for the time decay effect if I just gave the option enough time to play out.
Sure enough, it took a little longer to play out than Mike’s indicator said.
And frankly … the options dropped A LOT.
Last Monday, June 14, my puts were down 60% … even though the Dow was trading lower than when I first bought them.
Then on Friday, when the Dow dropped again, I was able to sell them for a 100% gain.But I knew to trust Mike’s indicator. I held on to my convictions, backed by Mike’s data. And over the course of the week, the Dow started dropping hard. My puts soon made up all their losses.
You heard that right… I went from a 60% loss to a 100% GAIN in one week.
This is an actual statement from my brokerage account. No smoke and mirrors.
During the last week of May, I bought 20 contracts across three trades for a total cost of $4,780.
Then on Friday last week, I sold them for $9,600.
That’s a 100.83% gain exactly. $4,820 in profit.
I then took a sliver of those profits, just $1,000, and flipped the switch … going from risk-off to risk-on in the form of a call option, also on DIA. This was to play the rebound that Mike’s indicator predicted.
And sure enough, on Monday, the Dow rebounded. It was up 1.5% intraday and I sold the call option for a $700 profit — a 70% gain.
Between those two trades, I put $5,520 in my pocket.
If You Hear This, Turn and Run
None of this would have been possible without Mike’s indicator.
And again … these were totally separate from the trades Mike recommends. I typically don’t buy his recommendations because I want subscribers to have first dibs. But I was still able to use his research … just from this one indicator he shares once a week … to protect my portfolio and also score a nice profit.
Now, there’s something you have to understand. Big gains don’t happen every time. Sometimes Mike puts up smaller wins, sometimes bigger. Right now, he’s actually on a bit of a cold streak. But I’m confident Mike is going to turn it around. He always does.
I’ve seen this happen plenty of times, and not just to him. (This is common among a lot of options traders, including the experts. In fact, if a trader tells you they never lose on their trades, you should turn and run the other way. They’re lying.)
If you haven’t given One Trade a look, you really should. Subscribers get daily trade guidance (whether to buy, sell, hold or do nothing) and they also get access to Mike’s premium weekly newsletter, Market Intel, where he shares his high-level market guidance.
One Trade readers get a premium version of Market Intel that is more focused on what his Volatility Watch indicator is showing.
Keep an eye on your inbox tomorrow for Chad Shoop’s weekly Bank It or Tank It. (I got a sneak peek at it. It’s a can’t-miss for anyone looking for big moves in the tech sector.)
Chief Editor, True Options Masters
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