It’s been a week of wild swings in the markets!
Stocks fell 30% with the coronavirus pandemic.
Then the Dow Jones Industrial Average surged 20% this week … even after record-high weekly unemployment claim data was announced.
On Friday, though, the markets fell again.
If you look at the Dow in the past 30 days, it’s well off its highs — even taking into account the rally this week.
You, like me, might have questions.
Is this a rally?
Have we seen the bottom?
Are daily swings of 20% or more the new normal?
Expert Warns: It’s a Trap!
I thought these were questions best answered by our technical traders.
So, I asked my colleague John Ross. John is a senior analyst and co-editor (along with Matt Badiali) of Apex Profit Alert.
Here’s what he had to say:
This week’s bounce happened at a logical point. Stocks fell to important support levels, the news cycle ran its course through investors’ psyches and bottom pickers started buying.
The market is relatively stable for now. The Federal Reserve and the federal government have come through with support measures. Taken together, this will give investors a sense of peace for a few more days … or perhaps a couple of weeks.
But it’s a trap. It’s a temporary distraction that will keep investors from focusing on economic fallout that, in my opinion, cannot have been fully priced in to the market yet.
As this bounce pushes higher, traders will take profits and scared investors will use the opportunity to trim losses. That will open up the door to a feedback loop of selling and new lows.
I’d love to see a V-shaped recovery as much as anyone. But it’s not a high-probability bet at this point. A boomerang recovery won’t happen when risk still needs to be repriced.
So, if you have cash that you’ve been waiting to put to work … John advises it’s not time to buy stocks.
If you haven’t considered trading options, now might be an ideal time to take advantage of short-term plays.
Volatility like we’ve seen recently can result in a massive payout on options.
And you can use options strategies to profit when stocks fall!
If you missed our Winning Investor Daily announcement, John and Chartered Market Technician Chad Shoop are planning to send you bonus Winning Options Trades — one per week.
John laid out a way to bet on a fall in retail giant Walmart Inc.’s (NYSE: WMT) stock yesterday. (You can read it here.)
I like John’s approach because it’s so easy to follow.
If you think John’s trade on Walmart’s stock makes sense, there’s plenty more where that came from with Apex Profit Alert.
Just take a look at the closed trades in John and Matt’s model portfolio. This is every trade they closed in March 2020:
Take It From John’s Readers
But don’t take it from me. I’ll share what just one of John’s readers had to say.
Apex Profit Alert member Dan K. reached out this week to report:
Just letting you all know that my profits were very much in line with what you all had. It couldn’t have come at a better time for me. I broke my left foot just before Christmas, and was out of work for over 2 months. So, then I was able to utilize some of the profits to help my family get through some lean financial times here in recent months. So, I just wanted to share that with you all and thank you all so much. The Apex Profit Alert has already been a huge blessing to me and my family. Thanks again!!
To find out how you can access Apex Profit Alert today and take advantage of the volatility in the markets with John’s research, check out Matt Badiali’s special presentation today.
We have more to share with you this week.
Check Out Our Latest Videos
Chad Shoop is back with another Bank It or Tank It. This week, he covers the short-term trade setup on Canopy Growth Corp. in his 15-minute video, “Canopy Growth Corp. Stock — Bank It or Tank It.”
Charles Mizrahi, Editor of Alpha Investor Report, offers this 7-minute update in his video, “YES! It’s A Good Time To Invest in The Stock Market.”
And Anthony Planas offers his latest Marijuana Market Update in his 9-minute video, “Curaleaf Reports; Charlotte’s Web Expands & Coronavirus Update.”
Stay tuned to your inbox. We’ll keep you posted on what each new development means for the markets.
Senior Managing Editor, Banyan Hill Publishing