The newsletter consists primarily of an analysis of the S&P500 for the coming week. The results to date, you can judge for yourself from the results that are posted each week. Starting from this week however I will be adding a Trade of the week which is a trade in a weekly option, that has, the duration of one week, or less.

The trade this week was BIDU which was placed on Friday. The newsletter comes out Sunday’s and is the strategy for the following week. However, the newsletter can be pre-empted by myself, although it’s not foolproof, and take an early position in anticipation of the analysis, the reason being that very often, if no position is held, getting an attractive entry can be a problem. Of course, sometimes it is a boon.

Either way, from my own personal trades taken, the early position on Friday pays. Thus this option will become part of the newsletter that will be delivered prior to the market close on Friday, so that if a short-term trade suits your reward/risk management, you can take the trade.

I have worked out the probabilities for the BIDU trade, which is always part of my trade assessment.

BIDU Trade

Sell $135 @ $2.09
Buy $130 @ $5.65

Debit = $1.45

B/E = $133.57
Max Loss @ $130.00 [per contract]
Max Reward @ $135.00

Technical set-up:
3mth chart [bull]
25day chart [bear]
Force Index [bull]
Correlation [bull]

Probabilities:
Below $129.69 = 21.3%
Between $129.69 & $142.87 = 69%
Above $142.00 = 12%

Now the duCati report adds the final tick to the trade, which can be taken on Monday after you receive the report, but the trade will likely have changed it’s characteristics [better, worse]. The newsletter adds the correlation factor, which is if the trade is long, which this is, and the index is a buy or hold, then the trade has an added success factor depending on it’s correlation, which I already calculate.

Last week’s Trade of the week was the trade in QQQ. I played it safe, and traded another index. The returns to capital were 29%. The return on the BIDU trade is 41%. These are very high returns on a weekly basis, with a high degree of probability.

Further, if and when the market turns bear, or consolidates, with mean reversion trades, the weekly trades can be short trades as easily as long trades. This essentially adds huge value to the newsletter, that is already pretty damn cheap.

Obviously, the weekly trades will no longer appear on the blog.

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