There are a number of factors that are whirling around and trying to pull on the market. The growing tension between Russia and Ukraine continues to heat up and the potential for a huge impact on energy is very real. Inflation seems to be unstoppable and even with wages rising the cost of essential goods is proving difficult to keep up with. And, the Feds are still trying to figure out which dial to turn with interest rates to keep some kind of lid on this economic witches brew that is about ready to boil over.

So which of these will end up being the winner in the fight to control the next move in the markets?

Truth be told, it doesn’t really matter. each of these factors has a much greater propensity to push the market further along its downtrend we have seen since the beginning of the year. The why doesn’t matter nearly as much as the what direction. In spite of these continued failed attempts to find some type of support and to break through upside resistance, the market continues to trend down.

The S&P fell below its 200 day moving average yesterday and continues the slide. Now the main thing is to play the drop and watch for indicators to signal a true bottom.

Finding the right strategy to play a declining market is key. We outlined a number of very useful ETFs for a bear market previously (you can read the article here) and using options on these ETFs can greatly accelerate the potential gains. Don Fishback offers his amazing quick reference to options strategies for free. If you haven’t grabbed his Quick Start Guide To Options Trading yet you should do it right now. For new traders it is an awesome place to start and for experienced traders it is the ideal refresher that may remind you of the tool you have overlooked as you try to get the most from this trend.

Keep learning and trade wisely,

John Boyer


Market Wealth Daily