Last week I got out of most of my positions. I’m doing what I’ve got to do to protect myself. In times like these, I’m not worried about the upside, I’m worried about protecting the downside.

Right now, I’m focused on managing position sizing, navigating the markets, and getting ready for some chop! You can read more about why it’s important to Protect your Ass…ets! Here. 

Despite my cautious attitude towards my portfolio in this highly volatile environment, I am still looking for trading opportunities when they are set up. On Friday, despite significant market weakness, we got a great long setup in CFVI. Here is some of my commentary from my live trading room:

Dec 3, 2:09 PM

Jeff Bishop (Moderator): starter on CFVI @ $11. I’ll build and probably hold over the weekend with Trump media rumors

Dec 3, 2:29 PM

Jeff Bishop (Moderator): still adding CFVI…

Dec 3, 3:19 PM

Jeff Bishop (Moderator): CFVI & DNUT. Only safe havens are Trump scams and delicious donuts. Love this market

Dec 3, 3:20 PM

Jeff Bishop (Moderator): I’m gonna keep buying the Trump scam though. Nothing wrong with that. I plan to hold into Monday too

Dec 3, 3:26 PM

Jeff Bishop (Moderator): The ONLY reason I would see the markets bouncing from here is the fact everyone is so bearish right now. The biggest rallies come in bear markets

Dec 3, 3:29 PM

Jeff Bishop (Moderator): just no way the social media clowns aren’t talking up CFVI all weekend. Then I want to sell them my shares on Monday much higher from here

Dec 3, 3:35 PM

Jeff Bishop (Moderator): I now have an irresponsible amount of CFVI into the weekend

Dec 6, 8:11 AM

Jeff Bishop: I’m scaling out of CFVI in the pre-market, trying to leave some for the market open 

Dec 6, 9:36 AM

Jeff Bishop: all out of CFVI now from Fri….

As you can see, despite my focus on risk in my overall portfolio, I was still able to load up on a great long setup on CFVI. 

You see, not all stocks follow the market, when certain stocks have a news catalyst they can have independent order flow. Moreover, despite my focus on protecting my Ass…ets I understood that the market could have a nice bounce on Monday, which it did, but I don’t trade with FOMO. For me, until the market shows me it has settled down, I am not focusing on the upside, I’m worried about the downside.

Here was my reasoning for the CFVI trade:

CFVI is a SPAC. On Thursday, it was announced that the company would be acquiring Rumble Inc., the neutral video platform. Rumble is attempting to be a neutral competitor to Youtube, if not a more conservative platform. Talk of a link to Donald Trump sent the stock over $14 on Thursday, as Donald Trump Jr. tweeted “Amazing” in response to the deal. However, by the end of the day, it sold off below $11 to close the day at $10.58.

On Friday, the stock stayed weak until it found some buyers in the afternoon coming into 2 pm. Then it was announced over the new wire that Cantor’s Howard Lutnick, In an Earlier Bloomberg Interview, Said He Can Confirm Digital World (DWAC) SPAC Partner Truth Media Will Use CF Acquisition VI (CFVI) SPAC Partner Rumble For Distribution. That was very important news.

DWAC, a Donald Trump SPAC to set up a new media company, traded from $10 to over $170 in 2 days. I knew that this news that CFVI would provide DWAC with distribution could send the stock soaring. 

To me, I knew that anything under $12 was probably cheap as Twitter Guru’s and Social media forums would be all over this and circulate the news over the weekend, likely leading to big demand on Monday morning. Thus despite the market weakness, I was loading up, playing for a gap up on Monday morning! Here’s what happened:

CFVI ran in the after-hours on Friday and gapped up even higher in the pre-market on Monday morning. As per the plan, I started selling shortly after 8 am on Monday and got out of the rest after the opening bell. Once again, thank you, Donald Pump!!

Bottom Line

Even during severe market weakness, there may be opportunities to get long stocks with independent order flow. This is usually the case with stocks that have breaking news that may be relatively undervalued.

CFVI was a perfect example. Despite the fact that I had been trimming my portfolio due to market volatility, I was confident getting long this setup for a swing trade over the weekend with size! It worked out, and I was able to exit higher on Monday in the pre-market.