There is no doubt the S&P 500 (SPY) has been volatile over the past month or so.
In fact, we’ve seen historic drops and advances.
Vanguard founder Jack Bogle recently said:
“I have never seen a market this volatile to this extent in my career. Now that’s only 66 years, so I shouldn’t make too much about it, but you’re right: I’ve seen two 50% declines, I’ve seen a 25% decline in one day and I’ve never seen anything like this before.”
Through all of the crazy market volatility, the S&P 500 has managed to break below its important long-term trend line: the 200-day moving average.
This type of volatility and price action often occurs during bearish cycles.
Now, while price action really doesn’t matter to me . . . I’m incredibly enthusiastic about the profit opportunities we’re seeing from the heightened levels of volatility as seen through the VIX.
I’ve already been leaning bearish throughout 2018 . . . and the return in market volatility has helped my readers and me to reap very large profits this year.
In fact, while the stock market has moved lower, I have won roughly 90% of my trades . . . with cumulative gains exceeding 200%.
My strategy of choice in this market environment is something I informally call Bloodbath Trading.
It’s probably the most-used trading strategy in my arsenal for a variety of reasons. Here are a few:
- I believe the market doesn’t crash higher; it crashes lower.
- The strategy allows me to have a margin of error just in case my directional assumptions are wrong.
- I can define my own risk/reward before entering a trade.
- And, I can choose my own probability of success on each and every trade I place.
The beauty of my Bloodbath Trading Strategy is that the stock doesn’t need to move in any particular direction. All we need is for the underlying stock price to stay below the price we set for the short amount of time we’re in the trade.
Interested in how my Bloodbath Trades work? Sign up for my FREE upcoming webinar on Dec. 27. I will go over my step-by-step approach to the strategy and present a few live trades on my platform.
If you’re worried about the stock market and want to start 2019 prepared, I hope you will join me. My Bloodbath Strategy is one of the soundest, most profitable ways to make money when stocks are under pressure.