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A former market maker on what comes next – and where the big money is flowing

Last night, my colleague Jonathan Rose held his free $10K to $100K Challenge event. The early feedback has been overwhelmingly positive, with viewers praising both Jonathan’s approach to trading and his gift for explaining it clearly.

So, today, I want to let you see for yourself what all the buzz is about. And as you’ll see below, Jonathan’s approach just delivered for his subscribers again this morning.

Last week, I sat down with Jonathan for an in-depth interview for Investing Insider, the other InvestorPlace newsletter I helm. I came away from that conversation with a notepad full of ideas – and a few things that changed how I’m looking at today’s market, both its risks and its opportunities.

In the wake of last night’s event, I decided Digest readers should see that interview, too. And the timing here is important…

The 10-year Treasury yield recently hit its highest level since 2002 – right on the heels of stocks hitting new all-time highs. Jonathan called that kind of disconnect something that “can’t last.” And right on cue, the market has faced heavy selling pressure over the last few days after our interview.

So, what happens from here? And how should you be positioned for it?

That’s where our conversation started. But here are some of the additional topics we covered:

• The bond market warning that’s “scaring” Jonathan right now – and why most investors staring at record stock prices aren’t paying attention to it
• Exactly what he will do if the Nasdaq drops 5% (hint: he’s not running for the exits)
• Why he expects more Fed rate hikes – and why that’s not a guess, but a read of what big money is already betting on
• The one corner of the market he’s avoiding until rates come down – it may be sitting in your portfolio right now
• His three favorite sectors heading into year-end – with specific stock names in each
• How he uses options to cap his maximum loss before he ever enters a trade – the part of options trading most people get backward

There’s plenty more in this candid, fast-moving conversation, and you’ll walk away with specific ideas you can use right away.

After the interview, go deeper with last night’s free replay

There’s only so much ground Jonathan and I could cover in our conversation. Last night, Jonathan had the whole evening – and he used it.

In his $10K to $100K Challenge, he walked through the full strategy behind his approach:

• How he spots unusual trading activity – and separates the meaningful signals from the noise
• How he combines that activity with Marc Chaikin’s Money Flow data before making a recommendation
• How he plans each trade, including what he’s willing to risk, before he enters it
• Why his approach can work with recommended trades costing less than $500 to enter

And yes, he explains the thinking behind the challenge’s name: his goal to show everyday investors how they could potentially turn $10,000 into $100,000 using his approach.

A Triple-Digit Example From This Morning

Speaking of how Jonathan thinks through a trade – he just gave us a perfect example.

Ahead of FMC Corp.’s (FMC) earnings, Jonathan recommended his subscribers buy both calls and puts on the stock. That’s a way to position for a big move without having to guess which direction it will go. As Jonathan put it:

We don’t have to predict which direction the stock will go to benefit from a significant move.

This morning, the move came. FMC dramatically lowered its third-quarter outlook – it now expects revenue of just $65 million to $125 million, down from a previous forecast of $840 million to $900 million. Shares plunged more than 36%.

So, Jonathan told his subscribers to take profits on the puts. Here’s how he described the result:

Our [put options have] given us more than 200% on our total position from this sharp decline, and I don’t want to get greedy after a move of this magnitude.

His members were quick to share their results…

(If you can’t see the screenshot below, subscribers are reporting gains of between 280% to 752%.)

That’s the kind of strategy Jonathan walked through in last night’s event.

Bottom line: If you’ve ever wanted to see how a former market maker and trading pro thinks through a trade from start to finish, this is it.

If you missed it last night, you haven’t missed out. The free replay is up and available to watch right here.

So, enough introduction. Click here to watch our interview or click the thumbnail below.

Then, watch the free replay of Jonathan’s $10K to $100K Challenge right here.

We’ll be back with our usual Digest tomorrow.

Have a good evening,

Jeff Remsburg