A Low-Risk Short Bet

Published on: March 20th, 2019

Raoul decides that it’s the time to try to fade the rally in equities and make a very low-risk short bet…


  • JL
    J L.
    20 March 2019 @ 21:20
    cost up to 10 points on the close, in any case don't IWM/SPY options always have a smaller spread than the futures options?
  • LD
    Lance D.
    20 March 2019 @ 22:01
    if gold can strengthen more against lumber copper and have oil audjpy roll over with vix/vxn in that 6-7 range that would be sweet
    • BR
      Brian R.
      21 March 2019 @ 04:30
  • RK
    Robert K.
    20 March 2019 @ 22:11
    Nice. With you on this one.
  • MS
    Mark S.
    21 March 2019 @ 01:59
    Raoul, I find it curious that you would limit your IV on the downside by selling a put. Why not go farther out in time to capture more vega buy only a put, and sell an upside call spread to help pay for it?
    • BR
      Brian R.
      21 March 2019 @ 04:32
      Yes, so long as you stop loss on that seagull @ 7points, based that with a risk reversal to see which is cheaper/better
  • RT
    Richard T.
    21 March 2019 @ 02:16
    I think 400m should be 400bn in two places
    • RP
      Raoul P. | Founder
      22 March 2019 @ 15:48
      Correct. Sorry.
  • BR
    Brian R.
    21 March 2019 @ 04:37
    1) It would be professional to mention the source where you claim pensions funds, mutual and bank of America's clients have all been selling... where do you get such info? 2) What do you mean by demographics are suggesting a net selling of $400m?
  • BG
    Benjamin G.
    21 March 2019 @ 16:03
    Raoul, The February 21st In Focus provided us with a couple themes to watch unfold, specifically GOOGL. I found this In Focus useful, but would also like to see you revisit things from the last In Focus. Perhaps how ideas are playing out or how your opinions have shifted.
    • RP
      Raoul P. | Founder
      22 March 2019 @ 15:48
      For sure. Nothing has really changed for me...Im just waiting on timing and themes to develop. The big one is the dollar to break out and that will give the big signal for almost everything else.
  • KA
    Kristian A.
    22 March 2019 @ 16:49
    So far so good
  • MS
    Mark S.
    22 March 2019 @ 21:43
    Hey Raoul, you posted this on twitter today in response to a question about 2/5 bonds (I presume steepener). "Just buy futures...easy and have plenty of leverage available, then use a wide stop loss for sizing." I don't understand what you mean or what the responder meant by 'strips'. Can you explain?
  • DY
    Dmytro Y.
    23 March 2019 @ 08:08
    The timing of this article might been right for now. Meantime the article greatly contradicts itself: 1) it says: "The entire pension fund industry, mutual funds and households are net sellers". how sure are you? Pension funds and Vanguards are buying, isn't it? 2) article says: "This chart illustrates that 2019 is expected the be the second-largest year for buybacks in history...USD 800 billion". Does it not say that equities are bound to be strong in 2019 with this massive buy back? 3) net selling is estimated at USD 400 million. Unless it is a mistypo error, we have 400 million selling versus 800 BILLION of buy back (purchase)? I am not equities bull here but the article rather suggest a bullish than bearish picture for 2019... ???
  • RM
    R M.
    23 March 2019 @ 14:01
    Raoul: If you look at the dollar chart (DXY) it has really gone nowhere fast since early 2015. For it to really break one way or the other, it would seem it needs to head over 100 or below 90 to really make an impact (almost like it is being managed against other Fiat, yes?). Also, after Friday, one might get more aggressive on a short! Nice timing.
  • AP
    Alistair P.
    23 March 2019 @ 21:22
    Hi Raoul, I am not so familiar with DeMark, but would like to learn. Is there a resource that you could recommend please? Thank you...
    • MC
      Mark C.
      24 March 2019 @ 07:13
      DeMark Indictors by Jason Perl. It's on Amazon.
  • KH
    Kavi H.
    24 March 2019 @ 06:37
    Does anyone else feel that the IWM weekly MACD (and other majors for that matter) need a few more flat/up weeks to create all the negative divergences to mark a true medium term top? I.e. I think there is a good chance that the top may come at the end of next month, and in the mean time these pullbacks are just to resolve the short term extremely overbought conditions. I am certainly bearish on cycle, but timing is always so tough argh....
  • TB
    Tim B.
    24 March 2019 @ 13:20
    So is the sort of set up where Monday sees a continued/accelerated decline? Thanks
  • VD
    Viknesh D.
    1 April 2019 @ 00:27
    Like the other recommendations in ‘it is time’ I don’t think that was the point to fade the rally, perhaps the 30 April deadline can save you this time if the decline from at leas 2870 has widening bars with high volume