Market Report: the Bear Market has begun

Todd Horwitz Chief Strategist BubbaTrading.com

Be Prepared not Surprised.

Last week was a wild one, but at the end of the week very little change. However, Inflation has exploded reaching 40-year highs. Crude Oil and Wheat were up over 20% adding dramatically to inflation. Add in a nonfunctional supply chain and you have a mess and bear market.

The Russia Ukraine conflict is adding more fuel to the fire and of course an administration that is doing nothing except making matters worse. Fed Chair Powell has gone into hiding which makes a rate hike unlikely for March. Hopefully someone will wake up and realize that opening the fracking and shale producing would solve most of our economic problems.  

The VIX has been on the rise indicating higher option buying signaling further selling is coming. Like every other week Call buying stays on top, we remind you that call buying is not always bullish. Rounding out the top five are bearish strategies, Put and Put spread buying, call and call spread selling.

The bulls were buying IWM, TSLA, AMD, BAC and GLD while the bears were selling, SPY, XLF, CWH, IQ and USO. As we look at the buy sell list, a case can be made the buying of GLD is bearish. This week should tell a big story, between the pressure on markets and the events in Russia/Ukraine it could get wild.

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