By: Steve Smith
On Saturday the 13th, I sent an article that explained why I was looking for a steep market decline. This Sunday, I sent you an email with a link to the same article because I felt sure that it was a very timely message…
And today seems to be proving me correct. Of course, we will see what happens. Remember, the market can stay irrational longer than you can stay liquid.
Tech stocks are seeing a much-needed correction. We will see if it continues.
This isn’t the end of the world though, so stay calm. Tech can still give more gains back and be up over 20% since the whole pandemic started. They were just WAY overvalued.
People were just trading emotionally, which is always a bad idea, and when Snowflake did an IPO at 100 times sales, I think investors realized it was time to cool things off.
The 10 yr yield dropped this morning and we have not seen cycling of the money taken out of tech into other sectors…
So I tend to think that the money is going into treasuries and cash. That makes sense considering all of the uncertainty.
Not only were valuations off the charts – but with the election around the corner, continued social unrest, and a possible reassurance of COVID in Europe…
Investors will be looking for safety.
I expect to see the market grind lower as the election approaches, much like in 2016. If there is no clear winner, it could keep grinding lower after the election…
But as soon as there is a winner, the pressure will likely release. The rebound will depend on who is elected and how the market feels about it.
This is why we trade rather than buy and hold.
I started seeing signs of a bearish market late last month, so I put on a few bearing trades in Options360 early in September. We exited 2 of those positions already for substantial profits:
- 55% gain in Best Buy, and
- 62% gain in QQQ
We still have 5 positions on in the model portfolio and I am always on the lookout for more good trades.
I expect to find some exciting opportunities over the next few months because we make money trading when the market is going up but we make MORE money when the market is falling.
You can get access to all of my trades for just $19.
To Your Success,
P.S. Get all the details of the $19 trial membership here.
The next few months could be the most profitable of the year. Don’t miss out! Click here and try Options360 for just $19.
Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.
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