9 trades to tame a bear market

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More economists are pointing to bearish storm clouds that don’t bode well for stock prices. Happily, the stock market (SPY) offers an opportunity to make profits, in whatever direction… if you employ the right strategy. This article will go into more detail on market outlook with a trading strategy with 9 picks to exit on the right side of the action. Read below for more details…

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Let me turn to the important conclusion of this week’s commentary.

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Not only do I believe we have a very bullish bear market ahead of us, but I have selected 9 trades to set you up to profit as the market heads to new lows.

More on that a little later. First, it’s important that you appreciate the bearish storm clouds gathering over the next 12 months and why stocks will soon fall much lower…

Earlier this week I offered my most consequential commentary to help explain why a bearish and bullish bear market is on the way. In fact, I highlight why the Fed wants this, and even needs it.

Yes, it sounds quite conspiratorial on the surface. However, I think the truth of the matter will come out quite easily as you read this.

If you haven’t read it yet I’ll share the link below as it makes a good background for further discussion:

The Fed wants a bear market and a recession

A key point in this is about the Fed’s array of tools to help reign in the demand-reducing inflation. One of the least talked about, and yet powerful tools, is the idea of ​​”talking the market”.

Here’s the key takeaway from the article on that topic:

So “market talk” is about creating a pessimistic environment that leads to less demand. This can be best understood by appreciating that the people who hold the most stocks are the country’s The richest people are also the ones who spend the most as consumers. They are also the captains of industry who control the corporate purse strings.

With this in mind now consider this chain reaction:

More bearish on the stock market > More pessimistic economic outlook > Less spending (consumer and business) > Lower demand > Lower inflation

Once again it seems that I am going on the path of conspiracy regarding this conversation. But consider the stern comments made by Fed officials every time stock prices rallied over the past few months. This is the essence of talking down the markets.

With that backdrop consider the speech by Fed Governor Bullard on Thursday morning, which took stocks down in a hurry. Here’s a link to a more complete article on what they discussed. And here’s what I believe is the main eye-opening comment:

However, Bullard’s presentation argued that 5% could serve as the lower limit of where the funds rate should be, and the upper limit could be closer to 7%. This matches up well with current market pricing. account, which also sees the fed funds rate hovering around 5% through mid-2023.

Let me resume this important conversation.

Many traders thought that the possible indication of peak inflation in the CPI report this month was good reason to start the next bull market. This led them to believe that the previously thought 5% level for the fed funds rate was never going to be achieved because it was not necessary.

Not only that Bullard is saying that 5% is still in play. Rather, it is at the low end of the range needed to moderate inflation, with a realistic probability of 7%. This level of enthusiasm comes along with recession.

I can assure you that the leaders of the rally of up to 4,000 in early November did not appreciate this important fact. Heck, not even the bears who pushed shares down to 3,491 in early October seem to have appreciated the prospect, which will now have a detrimental effect on the economy and the stock market by extension.

Once again, the bearish and bear market thesis is still in full swing and lower lows are on the way this year. That’s why a recent Wall Street Journal poll showed that market experts now expect a recession 65% of the time in the next 12 months.

Note that the average recession and bear market came with only a 40% expectation of that negative outcome. So, that shows you a very noticeable increase in negativity about the future from investors.

For these reasons, and many more, I still believe that 2,800 to 3,200 is the basic range of the bottom of this bear market for the S&P 500 (SPY). And if you put a gun to my head for picking the exact level I’d say a little under 3,000 would probably be a fair cause for panic and surrender which would mark the true and permanent bottom.

However, we are getting way ahead of ourselves as this is happening 3-6 months from now.

Simply put, you should expect more stock market declines in the coming weeks and months. Thus, it is best to structure your portfolio to not only survive… but thrive in that market environment.

What to do next?

Discover my exclusive portfolio with 9 simple trades to help you generate profits as the market descends further down into bear territory.

The scheme has been working amazingly since it was implemented in mid-August and is generating a strong profit for the investors due to the fall in the market.

And now’s a great time to load back up as we deal with yet another bear market rally before the stock plummets even further in the weeks and months ahead.

If you’ve been successful in navigating the investing waters of 2022, please feel free to ignore.

However, if the Bearish argument shared above makes you curious what happens next… consider my updated “Bear Market Game Plan” which includes details on 9 unique positions in my timely and profitable portfolio.

Click here to know more>

Wishing you a world of investing success!


Steve Reitmeister … but everyone calls me Reity (pronounced “rightie”)
CEO, Stock News Network & Editor, RateMeister Total Return

SPY shares were unchanged in after-hours trading on Friday. Year-to-date, SPY has declined -15.65%, while the benchmark S&P 500 Index was up by % during the same period.

About the Author: Steve Reitmeister

Stocknews viewers know Steve better as “Reity”. He is not only the CEO of the firm but also shares his 40 years of investment experience in the Ratemeister Total Return portfolio. Learn more about Rieti’s background, plus links and stock pics of her most recent articles.

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