Thriving in the white water trading rapids

Special Weekend Edition

When I was in high school, our family went white water rafting for the first time.

It’s one of those things that looks a little scary from the pictures, and is definitely stressful at the moment, but also a lot of fun.

Every raft has a team, and there’s the guide at the back that directs the team through the rapids. These guides have gone through the river many times, probably twice a day for weeks throughout the summer. They know that river well.

What seemed like a danger to us was a standard thrill to them.

All we had to do was listen and follow the directions of our guide.

In the end, it’s a much more fun experience than a simple float trip.

I think trading can be that way. I used to think that following a trading guru would be similar to following a guide through the white waters. But I now realize that my guide is simply my plan.

When in doubt, I go back to the plan. What does it say to do? Okay, let me do that.

This is important because no matter how successful some guru that you follow is -- yes, including me -- it still comes down to making decisions with your own money. Sure, I want to learn all I can from the wisdom & experience of others, but I also take 100% ownership of my trading decisions.

And despite the choppy nature of the markets (I believe we’re about to leave some calm bullish waters and enter a few months of “white waters”), I can have some profitable fun as long as I trade my plan.

Comments: The bears took over yesterday. Not a huge surprise. Thursday was the end of the month (usually bearish as folks take off their positions). Friday was the deadline for the new tariffs, which echoed April 2nd, Liberation Day. 

The technicals were near all time highs pleading for a bit of a breather. We need these pullbacks to get new opportunities to sell Puts. It can be painful, but frankly, the way we trade, this resulted in the largest single weekly collection of premium I’ve had since April. My Net Liquidation is down, but the cash is flowing. I love collecting premium on a pullback!

So, last Saturday this was 74, today it is 50.  That’s what I call a pullback. Often this continues until we get into Fear or Extreme Fear, so patience is warranted. That written, we may have lower to go, but I’m starting to look for some opportunities in stocks that took the “Tariff Liberation Day 2.0” hit.  Hopefully, you have some “dry powder” ready for the next couple of weeks.

Friday's jobs report could be a game changer for Fed monetary policy decisions through the rest of 2025.

Yahoo Finance

CNN Business

Why it matters…

This is getting as interesting as an economic soap opera can get! The Fed keeps interest rates the same with the justification that the jobs market is strong according to the most recent data. Two days later, the Jobs data were revised for the current month and the previous 2 months severely downward indicating that the jobs market is much weaker than thought. 

The Labor Department’s Statistics have been notorious for revising data after the fact. The President fired the person in charge of generating the report this week for what should be obvious to everyone as gross incompetence (my opinion).

Had the numbers been accurate, the Fed would not have had the justification to keep interest rates high, again, in my opinion. We might actually get some good numbers going forward.

3 real trades collecting $123 of premium for single contract trades. 

Average Return on Risk (ROR) = 1.84% for this week.

Sample Trade Ideas Spotlight (Free subscribers):

Average Return on Risk (ROR) = 1.62% for this week.

Sample Returns = $144 for single contract trades -- that covers more than 6 months of a Premium subscription, if someone took all of those trade ideas. 

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