Happy Friday, Evolvers!
This week brought some much-needed relief to unstoppable selling that’s been plaguing the markets. But we can’t get ahead of ourselves yet (more on that later)…
Beyond that, this has been a SUPER exciting week for me. I finally revealed the trading strategy I’ve been working on for more than ten years — shadow trades.
Even more exciting, next Thursday, June 2 at 8 p.m. Eastern, I’ll be joined by none other than my mentor, Tim Sykes, for a once-in-a-lifetime conference — the Shadow Trades Summit! Reserve your spot NOW!
And I might even give you a HUGE hint about shadow trades today…
But first, we have other pressing matters to attend to — our weekly Friday Q&A! Let’s get right into it…
Can you tell us more about these ‘shadow trades’?
I can, but I really wanna save the biggest secrets of my brand-new strategy for the Shadow Trades Summit next Thursday.
That said, I’ll elaborate a bit further for you now…
As I mentioned in yesterday’s post about shadow trades, these plays are INVISIBLE to 99.9% of traders.
However, if you attend the Shadow Trades Summit, I’ll make you a part of the 0.1% that’s in on my secret strategy.
Today, for Evolvers only, I’ll reveal a crucial part of the strategy…
Shadow trades wouldn’t be possible if I hadn’t recently secured a $500,000 contract, the same one used by some of the biggest institutions in the stock market like Bloomberg, Nasdaq, Etrade, TD Ameritrade, and others…
It’s really exciting, and I’ll tell you that’s a huge hint. But I can’t give away more before next Thursday!
After this week’s bullish price action, do you think the market has hit a bottom?
First, I’ll say this is an impossible question to answer with certainty…
Many bears are calling for an even bigger plunge in the stock market, viewing this correction as the initial crack in a giant iceberg.
Remember in mid-March, when the S&P 500 ETF Trust (NYSEARCA: SPY) went on a 10% bear market rally, only to come crashing back down again?
To put it in perspective, the SPY is now trading over 12% lower than where that rally topped out.
Realize that this could happen again. Always be prepared for anything.
Then again, just like momentum runs inevitably run out of steam, short-term bear markets usually end with sharp reversals to the upside.
Bottomed-out reversals can reveal incredible trading opportunities on the long side. When the market hits a hard bottom, it can be like a blow-off top in reverse.
That’s a big reason why I bought calls on Walmart Inc. (NYSE: WMT) and the ProShares Bitcoin Strategy ETF (NASDAQ: BITO) this week. I’m happy to ride the bear market rally, but I’m not getting ahead of myself thinking the selloff is over.
It’s just like my mentor Tim Sykes always says … Ride the hype, but NEVER believe it!
So, assuming this bear market rally lasts, and the major indexes don’t drop another 20% (yet), what signs can we watch for a market bottom?
- Volume: Watch closely for a SPY green day with HUGE trading volume (200 million shares or more)…
- Options Flow: If SPY and QQQ’s options flow begins to tip noticeably bullish, it could be a signal that big money is betting on a big pivot upwards…
- Sentiment: This is more difficult to track through hard data … you have to feel it. But if you want my advice, stalk the internet like a hawk. If you notice a clear shift in how other traders are talking about the market’s direction: pay attention.
Bottom line: None of these three things have happened yet, so I’m proceeding with caution. Let’s call it cautious optimism for now.
I want everyone to get some rest and have some fun this weekend, but don’t forget to study!
There’s still wild volatility in the markets right now. We must be prepared for anything come Monday morning.
And again, I hope to see you all next Thursday, June 2 at 8 p.m. Eastern for the Shadow Trade Summit!
Thanks for the questions … I LOVE hearing from my students. Have a great weekend!