When I walked into the office each morning as a trader, I knew some days were going to be much bigger than all the others.
On very specific days, there was simply more money to be had… because the government was releasing big economic data. Things like inflation reports… jobs data… and interest rate changes.
On the surface, those stats might not seem very exciting… But it meant heavy hitters, regular folks, and trading algorithms would all be taking more (and bigger) swings at the market.
And that huge jump in volume and volatility caused a kind of “shockwave”… which enabled us to trade for even better, faster gains than usual. Just a quick handful of trades on these days could set up a trading account up for the whole month.
And lately, those big economic data days are moving the markets even more than in past years… They’re providing great opportunities for traders to bank some real profits.
Let me show you an example from a couple of months ago…
The False Pivot Story
Over the past year, inflation – and the Fed’s rapid interest rate raises to halt it – has been one of the biggest stories in the market.
That’s why, each month, there has been a massive build-up to the latest consumer price index (CPI) report.
And any hint that inflation is slowing, even by just the tiniest amount, has set off a false narrative… The market keeps expecting the Fed to pivot and start to go easy on any future rate raises. That would be great for stocks – so they often start to rally.
However, this pivot narrative keeps missing a key data point… Fed Chair Jay Powell has consistently maintained that he’ll keep ratcheting the interest rate lever higher until inflation is back in check.
And this gap between what the Fed was saying (and doing) and the market’s pivot narrative set us up for a really great trade in December.
With inflation data coming in on December 13 at 6%-0.3% below the previous month’s and 0.2% below forecast – the market initially bid up stocks, sending the S&P 500 higher.
Check out the chart of the S&P 500 Index ($SPX) below…
S&P 500 Index (SPX)
I knew that with the market once again getting sucked into a false move, there was good money to be made when the story unwound yet again…
So, we entered a short position the morning of that inflation release by buying a put option on the S&P 500. (Note that a put option increases in value when a stock price or index falls.)
And after that initial burst of optimism faded, SPX soon turned around and started heavily selling down…
That sharp move lower enabled me to send out a trade alert to my subscribers just two hours later to close out half of our position for a 165.9% gain. I kept half our position open for just a while longer – to try to eke out further gains.
And as it turns out, SPX continued to drop.
Less than one hour later, we closed out the remaining half of our SPX put position for a 181.2% gain. That ultimately resulted in a blended gain of 173.5% in just a single day of trading.
To be clear, I generated this big return by trading options.
Yet this example shows that by trading on key economic dates – and understanding market expectations – you can set yourself up for some genuinely outsized returns…
Free Trading Resources
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Don’t Miss This Upcoming Money Shock
As I mentioned above, right now these “shocks” are hitting the system harder than ever.
After all, who cared about inflation five years ago? But because of the current environment, these economic release dates are more powerful than they have been in recent memory.
In fact, I see 32 specific opportunities this year alone. And the next one is right around the corner…
That’s why I’m creating a calendar of each of these “money shock” dates that I’ll share with you… And I’m preparing a special briefing to explain more about this phenomenon… and how to trade it.
I’m calling it “The Money Shock Calendar” event, and it’ll happen on at 8 p.m. ET on February 22 – just a week away.
So if you’re interested in learning how to amplify your trading on these dates, then please plan to tune in. It’s completely free to attend… All I ask is that you RSVP right here with one click.
I look forward to seeing you then…
Editor, Trading With Larry Benedict
Are you interested in using economic release dates to profit off big market moves in 2023?
Let us know your thoughts – and any questions you might have – at [email protected].