Making a Bearish Bet This Week

This is a raging Bull Market in stocks.

Seasonal strength is kicking in, right in time.

We’ll be discussing this all on Monday night @ 6PM ET during our LIVE Conference Call. Premium Members can Register Here.

Sector rotation is the lifeblood of a bull market. This cycle is clearly no different.

And breadth expansion reigns. Remember all these angry people telling you how Small-caps were going to drag the rest of the market lower?

It’s actually been the exact opposite.

All of this is perfectly normal. Take the time to go back and see for yourself.

And so, of course, we’ve acted accordingly over the past few weeks putting out a series of very aggressive long positions.

But today, we’re doing the opposite. We’re making a bearish bet on a stock to help balance out our portfolio.

To be clear, we also put out a couple of longs this week, but I want to highlight a bearish position we really like in Eli Lilly $LLY.

Look at this thing. Simply tell obese people they can just take a drug instead of exercising and eating healthy, and voilà.

It’s amazing how much money can be made by helping lazy people be lazy.

And hey, we’ve been on this one for a long time. If you hang out at the new 52-week highs list as much as we do, you’ve been on this one too. $NOV is another one. Similar situation there.

But today we’re betting on more near-term downside for $LLY.

We’re long the April 600 Puts. But we’re helping to pay for those by selling an equal amount of the April 500 Puts.

While our risk is defined, our upside is also capped. But that’s okay because we’re capping our profit potential right at the level where I think the stock may run into some support.

I like this trade on it’s own, even if we did not have any other positions in the portfolio.

But I like this trade a lot more BECAUSE of all the bullish positions we’ve been putting on in the portfolio.

Remember, Eli Lilly ripped while a lot of other stocks struggled. So it wouldn’t surprise me at all if Eli Lilly continued to struggle as the rest of the market is doing well.

Here are all the details for the trade.

Let me know what you think!

JC