Earlier this month, a headline caught my eye…
Trader Bags $10 Million in Bold Fed Bet Minutes Before Jobs Data
While Bloomberg called this a “bold” trade… I believe it was a smart trade.
The number of job openings had risen from 10.44 million last November to 11 million in December. In other words, the economy still has a worker shortage.
Anyone who read the writing on the wall knew the jobs report would come hot out of the gate.
And knowing how to interpret what was going on… and how to play it… gave this trader a $10 million win.
But it wasn’t only a smart call that gave him those millions…
There’s another factor that I watch very closely… one that is amplifying the profit potential of trades just like this…
Higher Volatility
On certain days, a “money shock” occurs in the markets…
It’s a spike in volatility… when more activity goes on and the profit potential is bigger for traders.
This surge in volatility can be as much as 20 times that of any other day. And believe it or not, every day this happens is announced in advance.
That’s why, when I saw this pattern, I put together something I call a “money shock calendar.”
But what are these shocks?
It’s simple, really… On certain days, the government releases key information. And regardless of what the information says, the release causes a money shock.
In this particular trade, it was the release of the jobs report. Everyone from pundits to the president watches this number because it tells us about the strength of the jobs market.
That ties into everyone’s least favorite watchword… inflation. A strong labor market means stronger inflationary pressures.
And with a Fed that keeps raising rates to fight inflation, a strong jobs report tells everyone that the rate increases aren’t stopping anytime soon.
So, you can begin to see why a report that normally might seem boring suddenly begins to cause waves in the markets…
As traders, though, the important thing isn’t what the jobs report actually says.
Even if the jobs report had come in weaker (signaling that rate cuts might ease)… the news still would have caused shockwaves in the market.
What’s most important to us is knowing when one of these money shocks is about to hit… not the specifics of the data release.
That’s because we can use these dates to play the volatility in different ways.
Let me show you one example…
Trading Oil
Back in January, we issued a trade alert to my readers betting against the United States Oil ETF (USO).
Oil rallied to start the year, but demand was still sluggish. And on the chart, we could see USO was trading right around its resistance zone of $78.50 a share.
So, we expected to see oil pull back in the near future.
On February 1, OPEC decided not to cut production… which didn’t give the bulls the news they were looking for. That started the move in our direction…
And then we hit a money shock.
The jobs report hit – and even though oil doesn’t directly relate to the jobs numbers that came out, the spike in volatility that the jobs report caused was enough to boost our returns and take profits.
We sold for a solid 25% gain that day.
That’s why it’s so important to pay attention to our calendar when these money shocks are scheduled.
If we know how to trade the increased volatility, we can use it to our advantage.
Boosting Our Returns
I’ve been a trader for over 35 years… and these “money shocks” are a consistent way I’ve found to boost our usual returns.
On money shock days, I’ve brought my readers returns like…
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That’s just a sample. There are many more… over 89 winning trades, in fact – just since January of last year.
And that’s why I want to share the 32 days you need to pay attention to this year in my “money shock calendar.”
I’m going to be sharing even more about these dates… and how to trade them tomorrow at 8 p.m. ET…
I’ll go live to explain how this all works and more. So please plan to join me then.
To RSVP with one click, all you need to do is go right here.
Larry Benedict
Editor, Trading With Larry Benedict