There are four months of the year when we have efficient markets.
That’s during earnings season, when companies release their quarterly results to the public.
The other eight months of the year are what I call “mean reversion.”
That’s when markets consolidate, and selling pressure is created by big institutions and easily panicked individual investors.
During this period, it’s not about company fundamentals, but about the headlines that can cause short-term manic reactions from traders.
Following NVIDIA Corporation’s (NVDA) blowout results last week, earnings season is now largely over. That means we’re now in one of those periods of mean reversion. So, you can expect the market to knee-jerk react to headlines and trigger more volatility.
We saw a perfect example of this recently, as a very public disagreement emerged between President Trump and Elon Musk over the congressional spending bill. Today, that rift grew into a chasm when President Trump threatened to slash government contracts and subsidies that would harm Musk’s businesses, including Tesla, Inc. (TSLA).
As a result, the stock is down roughly 15% today.
But there is some good news… the volatility can provide great opportunities for profits.
Nobody knows this better than my colleague Jeff Clark.
You see, Jeff has made a career out of navigating (and profiting from) volatile markets. He’s accurately predicted every major volatility spike this century: the 2007-’08 global financial crisis, the COVID crash and the 2022 bear market.
Each time, he’s helped readers trade that volatility successfully. In fact, he’s racked up more than 1,000 winning trades during volatile times – and it’s all thanks to his “chaos pattern” strategy.
In January, when investors were enthusiastically embracing the inauguration of President Trump, he warned his followers to prepare for a bout of extreme volatility.
He was right, of course. The day after President Trump announced his “Liberation Day” reciprocal tariffs on April 2, the S&P 500 fell 4.8%, the Dow lost 4% and the tech-heavy NASDAQ declined almost 6%. All told, it was the single worst trading day since 2020.
More impressive than Jeff’s prediction is that he backed up his talk by playing that volatility into 19 winning trades, including several triple-digit wins.
I sat down with Jeff to learn more about his “chaos pattern” strategy and talk about what he sees happening next in the market. Specifically, why he expects more volatility, and why the culprit behind the chaos will be the bond market.
Now, you can click here or the play button below to learn all about it. You can also read the full transcript below.
While I firmly believe that the U.S. is an oasis in a world full of chaos and that more market gains are ahead, that doesn’t mean the market won’t be volatile.
When a seasoned pro like Jeff believes that the stock market could be heading for more trouble in the coming weeks and months, we should think about all the implications.
But the good news is he has 10 specific opportunities that to help investors thrive during all this chaos.
That’s why next Wednesday, June 11, at 10 a.m. ET, he’s going to share the details of those 10 trade setups. He’s also going to dig into the details of how his powerful new stock screener finds “chaos patterns” every day.
This is a free event for you to attend, so I strongly suggest you make some time to hear what Jeff has to say. You can register here right now.
Sincerely,
Louis Navellier
Editor, Market 360
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
NVIDIA Corporation (NVDA)
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Louis Navellier:
Hello, Louis Navellier here. Today I’m sitting down with one of the top traders in America, Jeff Clark.
For the past 40 years, Jeff has accurately predicted every major market event and helped his readers get in front of 1,000 different winning trades. He predicted the 2008 financial meltdown and helped his readers double their money 10 different times during the fallout with winners, like 490% in 25 days from Palomar Medical. He predicted the 2020 COVID crash and proceeded to hand his readers at least 10 different chances to double their money that year.
Once again, in 2022, he predicted the tech crash in advance, which sent the S&P 500, stumbling nearly 20% that year, and sent the tech-heavy NASDAQ down 32%. But that didn’t stop him from giving his readers 12 different opportunities to double their money that year and capture gains like 230% in 21 days from Pan American Silver Corp. (PAAS) or 333% in only two days from Citigroup Inc. (C).
Most recently, he predicted the rough start to 2025 all the way back in September of last year, and the following stock market rebound through today and his readers got in front of quick winners like 97% in two days from OSCR (Oscar Health Inc.) or 90% in only five days from Marvell Technology Inc. (MRVL).
His secret? Something he refers to as the chaos pattern, a unique pattern set-up, which can tip you off to any major move in a stock or the markets. Which leads me to where we are today.
Jeff has some compelling new research that shows volatility could soon be dominating the markets once again. So, I wanted to quickly meet with him today to ask him a few questions about what he sees coming and how he views and trades the markets.
With that being said, Jeff, thanks for sitting down with me today.
Jeff Clark:
Thank you, Louis. Thanks for having me here.
Louis:
Jeff, you’ve been trading professionally for over 40 years. What first drew you to the markets and specifically to your unique style of trading during high-stress periods?
Jeff:
Well, I got to say, I get this question a lot, but I was drawn to the markets very early on in life. Ever since I was a little kid, I was fascinated with the idea of using money to make money. And so when I was, I don’t know, somewhere around eight years old, my father decided I ought to be taking a look at the stock market. So from that point on, I’ve been paying attention to the stock market. And when I was 18, I got my Series 7 exam, became a licensed stockbroker and started raising money and managing money from that point on. And long story short, it’s been 40-some-odd years I’ve been doing this.
And the attraction or the strategy I use, marketing got ahold of this thought and called it a chaos pattern because they thought that would resonate. But really, it’s a rubber band pattern basically. I look for situations where we have extended conditions and then I look for a move or a reversion of the means.
So if you want to call it what it is, it’s a reversion to the mean strategy, where basically we look for situations where conditions get extended either way overbought or way oversold, and I simply make a trade that assumes conditions will go back to historical norms. And that’s what I’ve been doing for 40 years and we’ve got a fantastic track record of success with it.
And what I like about this strategy is it works best in very volatile markets. Last year in 2024, we didn’t really have a volatile market. We had a one direction market where any selloffs were relatively mild and the rallies were also relatively mild. It was just a steady grind higher.
So far in 2025, we’ve had the opposite. We have just wild moves in both directions. So you have situations where that rubber band gets super stretched, both oversold and then snaps back and overbought and then snaps back. So we have a lot of opportunities to generate a lot of trades in this type of environment.
Louis:
I’m glad you mentioned mean reversion. I’m known for saying that there’s four months of efficient markets, earnings are coming out and then eight months of mean reversion, and now that earnings season is drawing to a close, usually they mean reversion trading picks up. And I believe Citadel is probably the leader in the mean reversion trading, so I’m glad somebody’s trying to figure out what they’re doing.
Jeff:
Well, there is a reason there, the largest hedge fund on the planet.
Louis:
That’s true. And also they had a good first half of this year so far, from what I’ve seen.
You accurately predicted every major market crash of the 21st century: 2008, 2020, 2022 and now 2025. What sets you apart from the others on Wall Street?
Jeff:
I’m going to say age. I have the dubious distinction of having been doing this for a very, very long time. So there’s not a lot of situations that I haven’t seen before. The conditions might be different or the economic situation that creates these opportunities might be different, but the investors’ response to them are always the same. We always respond either with fear or with greed, and we wind up in situations where anytime you see a panic sell-off, it’s usually probably the best opportunity to buy. And often times when you see panic buys, and we’ve seen a lot of those lately, it’s usually a pretty good opportunity to sell.
And so when you utilize a mean reversion strategy where you’re looking for that rubber band to snap back, you look for specific indicators. And if you use technical analysis, there’s probably thousands you can draw from. But I have a handful that I like to keep in my toolbox, and I refer to them constantly, and they often times lead me to notice things that maybe a lot of folks. And yeah, like I said, I think it’s just a matter of having experienced it before.
Back in 1982 when I first started in this business, I didn’t catch everything right away. Now, not that I’m catching everything, but I can sort of sense when things are getting a little overheated on one direction or the other.
Louis:
I’ve noticed that when the VIX is low, it’s kind of eerie because usually a sell-off will emerge. So does your recognition of the chaos pattern wait for an event, or do you just wait for it to get quiet and kind of creepy out there?
Jeff:
Well, there’s both of those, but I try to anticipate chaos in the market. I try to anticipate that snapback occurring. And you mentioned the VIX, the Volatility Index is obviously a very good tool for noticing that when the VIX was down around 12 or 11. I think it dipped into 10 at one point last year. It’s kind of a caution sign.
And then of course, we had a situation not too long ago. A little over six weeks ago where the VIX was up around 45, 50, and that was often times proven to be a good time to be a buyer of stocks. And had you recognized the caution sign back in December and recognized the buying opportunity that we had in April, you probably did pretty well.
So that’s just one of the indicators that I use to sort of navigate where we are and where we might be headed.
Louis:
So most people associate volatility with danger, but you see it as an opportunity. Why is volatility actually your favorite market environment?
Jeff:
Well, part of the reason is I like to trade options.
So when you have a low volatility environment, usually it’s a pretty good time to buy options because the option premium is not that expensive. When the volatility is high, when the market is pricing in a large degree of back-and-forth action, the premiums on options are fairly expensive. In that case, I like to be a seller of options. Often times selling not covered puts is usually my preferred method of strategy.
And when, again, if you’re utilizing a reversion of the mean strategy, you’re really just looking for extended conditions that go back to normal. And using options in that manner when you’re buying them cheap or selling them when they’re expensive provides you probably a little bit more bang for the buck than you would get in just buying shares of stock.
Louis:
I’ve noticed that about 42% of options are just day options. They expire in a day.
Jeff:
And that’s a wild situation that’s developed recently over the past year or two, where you have these zero data equity expirations that folks are buying and selling constantly.
I don’t trade a lot of those, but I pay attention to how they’re trading because how people place their bets for an individual day. It does have an effect on how that market performs that day and in the very short term.
Louis:
Yeah, I call those day options the tail wagging the dog.
Jeff:
I would agree with you; that’s a perfect example of it.
Louis:
Yeah. When Citadel writes a lot of options on NVIDIA Corporation (NVDA) or some other stock, it actually seems to impede its appreciation potential because they’re writing calls and they don’t want to fill ’em. So think of a mean reversion program to take it down so they don’t have to..
Jeff:
No argument here!
Louis:
..pay 3 billion bucks or whatever they just wrote.
Jeff:
Yeah, it does have an effect, and it’s not just on the stocks, but on the indexes as well. The SPY, the S&P 500 Exchange Trader Fund, has the highest volume of zero day to expiration options, and that definitely has an effect on what the market does in the short term.
Louis:
Well, I’m glad you mentioned the market indices. My friends over at Bespoke documented that if you bought SPY at the opening and sold at the close, you don’t do very well. In fact, they say you do a lot better by buying it at the close and selling it at the opening.
Jeff:
They’re selling it the next day. Yes.
Louis:
Yeah. So in other words, the smart money seems to settle up about 15 minutes after the close, and it’s even worse for the QQQ. So those indices can be tricky. So people need your expertise on that.
Jeff:
Absolutely, and if you notice in the option market, it’s interesting because the option market is almost a predictor of what’s going to happen very short term in the indexes.
And so often times when you say that Bespoke has come up with this analysis that if you buy the S&P 500 at the close one day, sell in the morning, you do pretty well.
But if you’re to trade options that way, the options are priced to reflect that possibility occurring. So if you were to buy a call option on the S&P in the afternoon, sell it the next morning, you’re probably not doing that well because the options are already predicting that occurring. So you’re paying for that already.
Louis:
Got it. So help me out here. Obviously, markets are volatile. Do you see any seasonal patterns? I’ve seemed to notice that Mondays, Tuesdays are better. Wednesday’s okay, but come Thursday, Friday, there seems to be selling pressure. I don’t know if traders are trying to clean out their inventory for the weekend. Do you see anything like that or is it just all based on the premiums and everything you’re observing?
Jeff:
Well, I tend to weigh the premiums as stronger evidence of where the market might be going direction wise. Seasonal factors are definitely in effect, but a lot of folks pay attention to seasonal factors. So, going back to the idea of options predicting the movements already, often times those seasonal factors are priced into options.
So if you think Mondays and Tuesdays are typically good days in the stock market, the option prices on the end of the day on Friday reflect the potential for Monday’s and Tuesday’s to be strong. If Wednesday’s and Thursday’s are weak, the option prices on Tuesday reflect that Wednesday and Thursday’s are weak.
Don’t want to get too far into the weeds on that, but having an understanding of the way the option prices try to predict what’s happening in the broad stock market, it really helps to know whether or not you should be a buyer of options or a seller of options.
Louis:
Got it. So I have friends that try to do what you do, and they computerize it and they like to write covered calls. But they’ve uncovered that a call written every 12 days will make more money than if you write it every 90 days or 120 days. So, is there a sweet spot in call writing where you get the biggest premium?
Jeff:
Oh yeah. The development of these options that expire on a weekly basis is enormous. What that does is it allows you.. let me back up just for a second.
When you look at how option premiums decay, so when you buy an option, you’re buying some intrinsic value and you’re buying time. So if you buy a 30-day option, you’re paying more for it than if you’re buying a 10-day option because you’re buying extra time.
Every day that goes by, though, isn’t valued the same. If you have a 30-day option and you lose one day worth of time, it doesn’t go down by 1/30th, it’ll manage to hold onto that premium pretty well because you still have 29 days for that stock, the underlying stock, to do whatever it is that will help that option benefit. But if you buy a five-day option and you lose one day, you’ve lost 20% of the time value of that option, it’s going to decay rapidly.
So when you’re looking at selling covered calls or selling uncovered puts, which is a very good strategy as well, I like the idea of selling the five-day options, the one-week options. When I’m buying options, I like the idea of buying a little extra time, so I’ll buy 30 or 60 days that gives me time to be right on that particular trade, time for that rubber band to snap back as I might expect it to.
So the important thing to remember is if you’re trading on the short term, the odds benefit the person who’s selling options. If you’re trading a little bit longer term, medium term, the odds can swing to the benefit of those who are actually buying options.
Louis:
So when you sell your calls, are those naked or do you have to own the underlying security as well?
Jeff:
I rarely sell naked calls. Naked means you don’t own the underlying stock.
Often times, a better strategy, if you’re bearish on a stock, is simply to buy puts. If you sell uncovered calls, it’s like shorting a stock. You lose money as the stock goes higher. And since there is no last number, in theory, you can lose an unlimited amount of money.
It’s not always the case. I mean, obviously there are times where it might make sense for a sophisticated investor to do that, but for most people who are trading options, selling uncovered calls is not a really smart strategy, simply because of that potential risk that’s out there.
If you think back to 2020, you know, when all those meme stocks were just shooting to the moon, GameStop Corp. (GME) had no business trading over a hundred bucks a share. So you might’ve thought it was a wonderful idea to sell an uncovered call option on GameStop at a hundred bucks a share. Well, that damn thing went to $450. That would have crucified a lot of folks. So that risk doesn’t make any sense. Buying a put option limits your loss when you’re shorting stocks.
The downside of that though, not the downside, but trading the other direction, selling uncovered puts, I think, is probably the single best income-producing strategy you can have. You sell uncovered puts on stocks that you want to own, and it prices that you want to own them.
So if you like the idea of owning, I don’t know, say Intel Corp. (INTC). Intel trades around $20 a share, you like the idea of maybe buying it at $19 and you’d be willing to buy it at $19. Why not sell to somebody an option to put the stock to you at $19?
So you sell an uncovered put, which obligates you to buy the stock at $19. Stock gets down to 19, you would’ve bought it anyway. You wind up buying the stock at $19. Stock stays above $19, you collect the premium. That premium’s yours to keep, that goes into your pocket and you can spend it however you want to.
So that’s a viable strategy. And selling uncovered puts has the same risk reward parameter as buying the stock and selling a call against it. So it’s designed to be a conservative income-producing strategy.
Louis:
Wonderful. Well, let’s get more specific here. Even though you’ve already been very detailed, you’ve obviously helped your readers make 100% or more on over 120 different trades, and sometimes this happens in just a few days. Can walk us through one trade that really stands out as kind of a wow moment?
Jeff:
Well, there’s a lot of trades that stand out, but obviously it’s like my favorite trade is the most recent ones. They’re the ones that are freshest in the memory.
And we just recently closed a trade in Delta Report, we closed a trade on Oscar Health, OSCR is the symbol on that. And this was a quick trade. I think we held it for two days, maybe three days, and we made something like 97%. So we were close to a double-your-money trade, but not quite. We made 97%. But this was a stock I’ve been following it for several months.
Back in September, October, I was trading somewhere around $24 a share. It got hit along with everything else in the market early in 2025, and it was trading down around $14 just a few weeks ago. And at $14 a share, Oscar Health is in the healthcare business, they use artificial intelligence to produce economies of scale and make things a little bit more efficient in the healthcare business, not to get too far into the weeds with the stock.
Anyways, turning around $14. That seemed to me to be relatively cheap because they have $11 in share in cash sitting on their balance sheet with relatively no debt, and they’re a profitable company, and those profits are growing rapidly. I think they have a 25% growth rate year-over-year.
So it seemed to me maybe the stock is reflecting an oversold condition that is not justified. So I told readers, let’s take a shot at this. Before the company announced earnings, let’s take a shot at buying Oscar Healthcare calls. So we bought the June 15 calls, I think they were, maybe they were the 14th, now I think about it.
Company announced earnings. Our objective was to stop at $14. We thought it could move to $17 relatively quick. Company announced earnings, it did in fact move to $17. We took our profits off the table, went back to the sidelines on the trade, and a couple of days later, or actually now you can look at the stock, it’s right back down to $14.
So it was one of those situations where if you had bought the stock, thinking long term, this is a wonderful hold, you haven’t made any money because it shot up and it came right on back down. If you bought the stock in anticipation of a quick move and you were fast enough to act, you got out with, $14 to $17, $3, about a 20% profit. But if you did the option trade that I recommended, you made 97% in two days, and now we’re sitting here waiting for an opportunity to get back into the trade.
So that was a really good example of that rubber band theory, right? The reversion to the mean. You had a situation that was oversold. It was a fundamentally cheap stock. It had a potential catalyst. We recognized it and we thought, okay, we could make a few dollars on this trade if it works out. Rubber band snapped back, and we were able to take the profit.
Louis:
On April 9, of course, our Treasury Secretary, Scott Bessent, and our Commerce Secretary, Howard Lutnick, met with Trump. And Howard Lutnick, Cantor Fitzgerald, dominates Treasury trading, and apparently, they told him he’s no longer in charge. The bond vigilantes are in charge. It’ll be interesting how many of those meetings they have to have with him.
Jeff:
And dovetail that with the comments about the Fed Chairman being, as the president has called him, not the smartest person in the room. Then you have all sorts of possibilities there. And I really do think it’s going to wind up being the Treasury market or the excessive debt. That is what causes the next Black Swan.
Louis:
Yeah, Jerome Powell gave the commencement speech at Princeton. That’s where he went to college, and he said he didn’t get an econ degree, even though his parents told him to get one, and he got a politics degree instead.
I used to work for the Fed, and I’m shocked by some of the people they’ve put in charge. I like Neel Kashkari. I like Austan Goolsbee. I mean, they’re pretty good speakers.
But yeah, it is very interesting what the Fed’s doing right now. And it’s also interesting to watch the collapse in rates in Europe, and I wonder if that’s ever going to spread here, but so far it’s not. So, fascinating times..
Jeff:
You have the collapse in rates in Europe, but you also have a spike in rates in Japan.
Louis:
Oh, I know!
Jeff:
Some interesting things going on.
Louis:
I know, and China’s got lower rates than Japan, and there might be a currency devaluation. But yeah, the bond vigilantes, which are, of course, the big institutional investors for our listeners that buy all this government debt, seem to oscillate between the U.S. treasuries and the Japanese bonds. So it’s getting to be interesting to watch.
Jeff:
And if there’s an argument to be made for chaos, I think that’s where the argument rests.
Louis:
Yeah, yeah. And it’s sad because the whole world is shrinking. I think it’s just us and India are only really growing in population. It’s really hard on countries like Japan or Europe, because when you’re losing households and you’re shrinking in population, how do you service the interest and all?
Jeff:
Exactly.
Louis:
I know under Trump, he might take Vanderberg Air Force base and turn into oceanfront lots or sell the Presidio. That would happen under Trump, but that hasn’t come up yet.
Jeff:
Not yet!
Louis:
So anyway, so 2025 is clearly chaotic, and you said that this year could be more volatile than 2008 or 2020. Why do you think most investors are dangerously unprepared?
Jeff:
Well, because I think most investors have sort of taken their eye off of the risk ball. It used to be when you buy an investment that the first question or the first concern ought to be, how much risk is there to this? Now investors say, how much return can I get?
And so they look at some of the stocks that are probably relatively inappropriate for their portfolios, and they think, okay, I’ll buy, I’ll put my money in GameStop, I’ll put my money in Palantir Technologies Inc. (PLTR).
And there might be justifiable reasons to own those, but if you’re older, do you really want to buy a stock that’s trading at 170 times earnings? Do you really want to count on that growing even more expensive as we go through things and folks have, I think, taken their eye off of the ball.
I hate losing money. I despise losing money. That’s why I don’t go to casinos and play the table games where the odds are against me because it breaks my heart when a dealer reaches over and takes those chips out from in front of me.
My first question is always, what is my risk in this situation? So when I’m making recommendations to subscribers, my recommendations are always along the lines of the same sort of recommendations I would make to my own mom, and she is 84 years old. She’s not in a position to take on a lot of risks, but she likes the idea of making a little bit of money when the opportunity arises. And so that’s what I try to put into my recommendations to subscribers.
So most investors I think are ill-prepared for decline because they’re not asking themselves how much risk is there in this, they’re asking themselves, how much can I make? Because they look over at their neighbor or they look over at their Uber driver, they look over at the kid cleaning the pool, and they’re making all their money in Bitcoin and Ethereum and fart coin or whatever other thing that’s out there, and they think, gosh, I got to get in on that too.
That’s sort of an exaggeration, but when you look at the valuations of a lot of stocks right now, and you see how it’s the ones that are trading at triple digit price earnings ratios that continue to move higher, and the ones, the boring ones that trade at 6, 7, 8 times earnings that nobody pays attention to, can’t seem to catch a bid. That tells me that folks aren’t paying attention to risk. They’re paying more attention to reward. And most of the time when we wind up in that sort of situation, there’s a negative effect in the broad stock market.
I’m okay with that. I don’t see that as being a bad thing. I think corrections are necessary in the market. Corrections are actually what creates opportunities for folks like you and me and perhaps a lot of the viewers on the screen today to put money to work and to actually generate opportunities.
Louis:
I’m glad you mentioned crypto. I noted that Paul Akins, who’s our new chairman of the SEC, who’s obviously helping create all the crypto exchanges and the regulatory framework. I did notice in his disclosure documents, he had $6 million in crypto himself, but none of it was Bitcoin. So I assume he thinks that as they provide liquidity, that those prices of all the other cryptos will go up.
Jeff:
Yeah, there’s probably some validity to that.
Louis:
But there’s also, let’s face it, a lot of people are still buying gold now because there’s a lack of confidence in central banks. So there’s other options. You don’t just have to do crypto and you buy gold at Costco Wholesale Corporation (COST) now. So that could be it.
So you are going to be revealing your full research and your chaos pattern strategy during a special event. What can people expect if they attend?
Jeff:
Well, we’re going to delve into the whole idea of reversion to the mean a little bit more. Like I said, the guys in marketing got ahold of it and said, “Hey, let’s call it a chaos pattern and make it more exciting.”
So we’ll talk about what my thinking is as we go through 2025. We’ll talk about the vision that I see setting up in the stock markets, in the bond market as well. We’ll talk about the best opportunities that I see coming down the road and the best ways to trade those particular opportunities. We’ll talk about the strategy that I’ve used for 40 years now and try to perfect, tweak a little bit, do whatever as the case is and adapt to the current markets to make it something that we can use very, very well to generate profits this year, next year. And on down the line.
Louis:
So you’re also launching a powerful new screener that helps you spot these trades faster. How big of a breakthrough is your new tool, even for the beginning?
Jeff:
It’s actually a really large breakthrough. It used to be, it still is, sort of.
Every Saturday morning I get up and I go through charts one by one by one by one by one, and I would cover about 1,600 charts. So it would take me several hours, if not half the day on a Saturday morning. And I’d just try to figure out what patterns I like, which patterns presented opportunities. I look for specific parameters and different technical indicators to tell me if we’re seeing overbought or oversold conditions in these individual stocks.
That’s a lot of legwork, but I’m used to it. I’ve been doing it for a very, very long time.
I got together with TradeSmith. We talked about getting together for several years now. We finally were able to work out an arrangement, and I told them, this is what I look for in a stock pattern. This is what I look for to tell me something is oversold or overbought. And they use those instructions to create an algorithm that is a screener that spits out, on any given day, probably 50 or 60 different stocks that fall within those parameters. So I’m looking at 50 bullish setups and 50 potentially bearish setups.
That takes care of a lot of that legwork. So I sort of have my Saturday mornings back, so I’m getting used to that idea. So every day, I get this screener, it’s sent to me well before the market opens. I can go line by line through each of the stocks that I like, and it doesn’t include any of the stocks that don’t fit within the parameters that I typically look for. For me, it’s an enormous breakthrough.
Louis:
Yeah, I track all my stocks on TradeSmith software. It’s a very powerful tool. So I would assume that because you’re on the TradeSmith system now, that it’s going to be a little bit more beginner friendly for new investors?
Jeff:
I think so, absolutely.
Louis:
So what kind of person is best suited for your recommendations and who it might not be for?
Jeff:
I would say because of the nature of how I trade, where often times part of the strategy involves selling uncovered puts, and most brokerage firms, you need to have at least $10,000 before you can do that type of strategy. So anybody who has $10,000 or more can participate in that type of strategy.
And I would say if you don’t have $25,000, you wouldn’t be able to properly diversify. So I’d probably set that limit. So, folks who have $25,000 or more can participate in the type of strategies that I utilize. If you have less than that, then work on building that up first, and then you can talk about coming on over after that.
The person that this is best suited for, folks who are looking for opportunities to increase the amount of return they get off of particular investments faster, while at the same time reducing the risk that they have off it. Because my entire strategy, it’s simply designed to focus on the risk. We try to eliminate that as much as we possibly can and then accentuate the rewards.
So when you look at a situation like the trade I showed you earlier, the Oscar Health situation, it was a two-day trade. We made 97%. Not saying every trade works out that way, but the alternative was you bought the stock and if you timed it perfectly, you made 20%, but if you didn’t time it well, you’re basically treading water off of it.
So that’s what I’m trying to do. I’m trying to minimize our risk, increase the potential return, and do it over a relatively short timeframe.
Louis:
Well, I for one am just ecstatic that you have essentially figured out how to capitalize on mean reversion. I should sign off here by telling folks a story.
So I’m in Palm Beach and I have a friend nearby that was a pension consultant, actually Wilshire Consulting, big fancy pension consultant. And he was affiliated with a Princeton professor who perfected this mean reversion system on the S&P 500. And his management firm exploded. He got up to $60 billion pretty fast, and then he sold out to Janus, and they got a bigger boat, by the way. He’s really quite a brilliant man. And every system has the liquidity limit.
But I think mean reversion is worse than ever now because of a Citadel. It’s clear what they do, and it’s clear how they will sell those day options and then try to knock the stock down so they don’t have to fulfill all the call options they just wrote.
So this is real, and I’m glad you have a powerful tool that everybody can use to monitor stocks and profit from.
Jeff:
Thank you, Louis, and thank you for letting me talk to your folks about this.
Louis:
Well, Jeff, I just wanted to say thank you for sitting down with me and telling my readers about your view on the markets and a little about your approach to trading that has made you so successful. You’re one of the experts I recommend people listen to during volatile market conditions.
Now, if you want to learn more about Jeff and his unique strategy for finding 100%-plus winners, often times in only a few days, then I encourage you to sign up for his Countdown to Chaos event on June 11 at 10:00 AM Eastern time. You’ll learn more about Jeff’s latest market prediction and how it could help you double your money at least six different times over the next 12 months.
Simply click the link at the bottom of your screen to read more about what you’ll learn. And thanks for joining us today.
