Market Volatility ALERT
⚠️🚨 WARNING: Buyer Beware! 🚨⚠️
BUCKLE UP. IT’S GONNA BE A BUMPY RIDE!! — The Market is taking a turn… Down!
How abbot this for timing, the Market begins to correct at the same time I post the Lesson about Risk Management and Discipline! Learning a lesson from this past February/March correction, I’m holding off on entering any new positions. The writing is on the wall, let’s take a look…
THE WIND
As you can see The Wind is blowing hard and not in our favor. If you want to take advantage of this, as you can see Gold and Bonds are doing well, which is typically where the money goes when the Market is turbulent and bearish and traders are fearful. I should’ve noticed earlier that money was moving into these Sectors as the $SPY and $QQQ were nearing 70 RSI. Again, this is where the Discipline of checking “The Wind” everyday is essential. so Gold and Bonds have already broken out but there might be plenty of upside ahead, but like I said, if you’re gonna trade right now, trade with caution!
Another play during a bearish Market is to go short instead of long. I don’t mess with proper shorting BUT if you want to do a poor man’s short you can so this by betting against the Market and “going long” on the $SQQQ which is setting up for a potential breakout:
Analyzing the charts we can see that:
- RSI is rising
- Price is beginning to move up towards the 20 SMA
- The MACD has upward momentum and nearing positive territory and the Signal Lines are on a path to crossover
- The TMO has flipped to Green
*NOTE: To do this same thing with the S&P 500, check out the chart for $SPXU
Volatility closing above the 20
Another indicator that the Market is headed for a downturn is the volatility is rising. Just look at the Volatility Indexes for the S&P 500 ($VIX) and the NASDAQ ($VXN):
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Analyzing the charts we can see that:
- The RSI is climbing
- Price has closed above the 20 SMA
- The MACD signal lines have crosses and the Histogram has upward momentum moving into positive territory
- The TMO has flipped to Green
Hopefully this post helps you make sense of the crazy Market action right now. I think the smart move is to wait for it to bottom out again and load up your Buy & Hold account with stocks that are on sale. But if you are gonna trade right now, please trade carefully!
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