Last week’s Chart of The Week was entitled, “Lessons Learned From Hedge Fund Blowup for Option Sellers – VIDEO.”

It discussed a hedge fund blowing up because of the volatility in the oil and gas markets – and the lessons learned as option sellers like us.

One week later and two more funds have blown up for similar reasons!

The Wall Street Journal reported in a recent article, “Two More Hedge Funds to Shut Down” (page B12, Dec. 1-2, 2018), that Dallas-based Brenham Capital and New York-based Brenner West Capital are shutting down.

The article said that Brenham Capital founder John Labanowski is closing because the fund’s strategy toward energy stocks was no longer working.  He said that there has been “some truly bizarre stock action.”





Master Trader has been watching for weeks USO for a possible short-term oversold trade.  In fact, we were long USO on the beautiful September breakout.

However, as the Video discusses, USO has been significantly lagging the broader markets, showing tremendous relative weakness.

Oversold does not mean to buy it.  Nor is oversold a compelling pattern to justify buying.

Objective traders would have stopped out of long positions using Master Trader Strategies (MTS) and recognize the power of this downtrend.

The Video analyzes USO on multiple time frames, discusses traits of trend strength, how to properly trade a bottoming pattern – and why now is NOT the time to buy USO.

With today's bullish gap up over last week's consolidation, however, we will be watching to see if those prior bars can form a support level from which to sell an out-of-the-money put spread on for our subscribers.

To see last week’s Chart of The Week was entitled, “Lessons Learned From Hedge Fund Blowup for Option Sellers – VIDEO,” click HERE.

The recent huge move in Natural Gas and Crude Oil left the hedge fund wiped out.

Not only was the fund 100% wiped out, because of the lack of money management and leverage, clients even owe money to the clearing firm.

You are in control of your investments and trades and if you do not have a money management plan, you are being foolish at best.

Learning a method to invest and trade is the beginning of becoming successful in the markets. As with any profession, the experience comes after education.

Most do not succeed because they do not last — and that is the direct result of no education or not starting slowly to gain the required experience.

We will always do your best to help you. Ultimately, you are in control.


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Happy trading!  If you have any questions or comments, please e-mail Greg Capra at or Dan Gibby at


All the best,

Dan Gibby
Chief Options Strategist

Greg Capra
Managing Director of Master Trader
Trading the Pristine Method — Origin and End

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