I’m bearish about the market. I was bearish last week, and I’m going to continue to be bearish until the market proves to me otherwise! The trend is your friend, as the classic trading adage goes. So I’m looking to get short large pops in weak stocks and the market. However, there is one thing that I’m watching that could signal a change in this trend!
That one thing is bonds, and I use the ticker TLT to see what bonds are doing. Here’s the chart:
As you can see, Bonds have been in a downtrend all year, along with stock indices. There haven’t been many places to hide this year, although there have been a few. Stocks love lower interest rates, and lower rates signal higher bond prices. Once investors feel safe enough to put their resources to work in bonds, I think that will also be a good sign for stocks. So before I turn bullish on the market overall, I’ll be watching the TLT closely.
I was bearish the QQQ’s last week, and here’s what happened to the options I was looking at.
They were up over 100% from the open price on Monday.
Unfortunately, I was a bit too patient and didn’t get my fill at $4.50, those put options only traded as low as $5.24. My job is to plan my trade and trade my plan. The idea was correct, but I never got the pullback I wanted. The main thing is that the reasoning was correct, and I stayed disciplined!
One trade that did work was my trade in MARA last week, here’s what happened:
I noticed relative strength in Bitcoin. Given the fear in the QQQ’s, this was really unusual and led me to believe that the market would bounce, and Bitcoin would outperform. I chose to express this idea by making MARA my Bullseye Trade of the week!
The options I mentioned went up OVER 200% and I was able to capture over 144% being the piker that I am!
Like I said, not all trades work but the point is to think like a Professional over and over again!
I’m a nimble trader, I go long (stock goes up) and go short (stock goes down), that’s the flexibility trader’s need to have in this volatile and difficult market! I’ve been doing this for 20 years, and this knowledge is something I love sharing with newer traders to help them speed up their learning curve and avoid some of the pitfalls I see newbies make time and time again.
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