Market Report Bears market resumes

Market Report Bears market resumes

By

Todd Horwitz Chief Strategist BubbaTrading.com

Be Prepared not Surprised.

Last week the bear market resumed taking all indices into bear market territory. The selling carried through until Friday when buyers showed up. We did not see the end of quarter window dressing; we saw the funds taking their losses. The new quarter started out with a strong bounce going into a holiday weekend.

Economists and the FED have finally admitted to a recession which we believe we have been in for months. There are no cures on the inflation front except for the biggest fear, deflation. If we start to see a deflationary cycle the markets will get clobbered. There is a high probability of stagflation as well.

Options traders focused on bear strategies and premium selling as they sold iron condors and call spreads. The rest of the strategies were bearish put and put spread buying and call selling. The VIX remains high and looks to have settled at a higher low than previous weeks.

The bulls were buying TNA, PSNY, AMZN, BYND and QCOM. The bears focused on selling AAPL, AAL, SPX, DAL and RBLX. The picture is mixed but the bear market is confirmed. The selling has been orderly indicating a lot of room to go down.

Remember, we can’t predict what’s next, but the price action will give indications and guide us in the right direction. All signs are starting to point lower however flexibility is the key to trading successfully.

As traders and investors, we have one thing to remember, follow the trend of the market. Be patient disciplined and leave your emotions out. The most important thing to remember is money management and self-control.

Todd “Bubba” Horwitz

BubbaTrading.com