Thriving in A Bear Market

January 28, 2022

After a volatile week…

…The S&P 500 and Nasdaq 100 saw late-day rallies.

It wasn’t enough to claw back last week's big selloff, but we could be seeing a short-term bottom.

But in a bear market, that means every rally is to be sold.

Aside from the market crash in 2020, we saw something similar in December 2018, but that is when the Fed stepped in with more easing.

Once the Fed stepped in, we snapped back into another bull market.

The Fed may have another hail mary attempt, but it seems like there’s too much damage.

What that means for us is that we need to take profits quicker and also roll out a trade for more time.

It’s also important to be patient and more rigorous with how we deploy our capital.

Let’s talk about the CBOE Volatility Index (VIX), aka the “fear” index, which closed at 27.66.

That means it's time to buckle up and focus on fast two-sided trading.

Portfolio Update

Here’s a recap of what we did this week.

On Monday:

No action.

On Tuesday:

Buy-to-open the AMC Feb. 11, 2022, $19/$27 call spread

On Wednesday:

No action. 

On Thursday:

Buy-to-open the DKNG Feb. 4, 2022, $18/15 put spread

On Friday:

No action.

Right now, we’re holding:

  • F Feb. 4, 2022, $25.50/26.50 call spread
  • F Feb. 4, 2022, $26/27 call spread
  • FCX Feb. 18, 2022, $48/$55 call spread
  • AMC Feb. 11, 2022, $19/$27 call spread
  • DKNG Feb. 4, 2022, $18/15 put spread

Have a great weekend and talk with you on Monday.

To your wealth, freedom, and options!

Joshua M. Belanger

Joshua M. Belanger
Joshua Belanger is founder of CounterVest and the editor of Hot Money Trader. He has been providing ordinary investors blockbuster returns since 2008. In 2018, the average return of Hot Money Trader beat the markets by over 15%