Don’t panic! Profit in a declining market
Below is today’s update from our hedging service Trend Technical Trader (TTT). Links to archives will not work as this is subscriber content only. But this should give you a good understanding of how a good hedging service can not just protect you in a declining market, but actually allow you to make significant gains in a relatively short period of time. If you wish to subscribe to TTT Click Here to receive a $250 discount and pay only $399.95.
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The DJIA dropped 1656 points this week, in what is the worst December for stocks since 1931.
Posted October 29: Please keep the DJIA chart and related commentary posted in the “General Recap” section below in mind. While the quarter isn’t over yet, we currently have a situation in quarterly momentum not seen other than on December 31 1999 and June 30 2007. Those dates immediately preceded the biggest bear markets of the past few decades. It’s still a very long way down, in points and in time, before the gross excesses of the past several years are unwound.
Posted October 03: While the senior index has made new all-time highs this week, the typically leading small-caps printed a two-month low Tuesday. That’s a historically unprecedented divergence. The only comparison was in early April of 2000, before one of the biggest market crashes of all time, when the DJIA made a two-month high while small-caps made a two-month low.
Small-caps often lead markets. The Russell 2000 Small-Caps index closed at a 2-year low and is not just down since the start of 2018 but down since the start of 2017.
GS (Goldman Sachs), our market barometer, closed at a 2-year low and below a supportive uptrend stretching back more than a decade to the low of 2008.
Don’t think this can’t happen to the DJIA or S&P500, or your favorite stocks. It can, and arguably it should since the excesses of the past decade are nowhere near unwound.
Stocks are just now finally oversold in the short term, neutral in the intermediate term, and still massively overbought in the longer term.
Keep in mind that it is from such slightly oversold conditions that crashes often occur, and that there’s been no sign of panic selling so far so that could still happen before a significant relief rally begins. The more likely short-term action however is a bounce into the new year.
Hedge position 1 (actual symbol subscriber content only) hit our sell limit today for a gain of 70% in 10 weeks!
Hedge position 2 (actual symbol subscriber content only) is up 47% for us since September. We’ll offer it up for sale as per the “Open Positions” section below.
Hedge position 3 (actual symbol subscriber content only) was recently sold for a gain of 40% in 5 weeks. We’re raising the buy limit to repurchase it.
Our 4 positions (actual symbol subscriber content only) to short junk bonds have closed at an 18-month high! We’ve raised stops on two of those.
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***Understand that these hedging strategies are simple for any investor to action, a simple click of the mouse on your online trading account, the same as trading any other stock or ETF.
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Stay tuned!