Three strategies to beat whatever the market throws at you next week

November 26, 2022 Three Strategies to Beat Whatever the Market Throws at You Next Week Take a look at the S&P 500 over the past year… Down, up, down, up, down, up, down, up… It’s a never ending series. No doubt it’s tough to make money, and I’m sure being all cash can appeal more than being in the thick of it most of the time. But that’s the wrong move to make right now. Inflation is still at 7.7% - and likely to be similar, if not higher, in November. The cost of living is eating away at every dollar you have in your checking, savings, or retirement account. All cash is all loss. So, do the opposite. Remember that whenever the market is open - so long as there’s volume, traders trading, and prices moving - there will always be opportunities to make money. The key here is not to be afraid of the above chart. And once you have that mindset, you’ll hit the ground running. You just need strategies to combat whatever comes at you. That’s what I want to speak to you about today. Let’s go over three types of trading activity that you want to hone in on in the coming weeks - and three strategies to make money from them. Targeting individual companies that decline the most from rising interest rates Really, the only “weapon” the Federal Reserve has to fight inflation is to increase interest rates. When you, me, and businesses alike have higher incremental payments to borrow money, that slows down our ability (and willingness) to spend. And because companies expanding underlies economic growth, the Fed is effectively trying to slow down the economy by making those payments higher and higher. If they can’t take out a loan, how can they go through with ALL of their business plans? This is especially problematic for sectors that rely on taking on a lot of debt to scale their businesses as quickly as possible. A perfect example is technology. That’s essentially why they’ve particularly taken a beating since the Fed started raising rates in March. Companies that are drowning in debt that hoped their shaky ventures into unknown territory would pay off are getting clobbered. And, believe it or not, there’s a way to make money from companies that are moving down… Through option contracts called “puts.” These give you the option to sell an underlying security (a stock here) at a certain price at a certain date. If you did some research and think Apple (AAPL) is going to fall below $125 by December 30, you might be inclined to buy $125 puts on AAPL for December 30. With an option, you’re buying the right to the contract. And that usually comes at many multiples lower than what the stock costs. The $125 puts for December 30 cost under a dollar right now. If you’re right and the stock moves down to $100, you have the option to sell it at $125 and make a $25 profit for every contract! As rates keep rising, more companies will fall under tough times, and this strategy is perfect to capitalize on that. Using volume indicators to predict price movements Volume can easily be one of the most important indicators to watch in the market. Not just for the market in general, but for individual companies, too. More volume means more buyers and sellers are coming together and competing for prices, so you have a better opportunity to get a good price and watch as a stock hits a breaking point to move in one direction or another. And there’s an entire host of market events each week that bring volume to the table… Economic data releasing, companies reporting earnings, Fed Presidents making speeches about macroeconomic policy, and more. The perfect indicator to use for this is VWAP - volume weighted average price. It’s what institutions use to watch a stock’s price trend based on its volume. This is what the indicator looks like (just a single blue line): If the stock is trading above, it means the price is higher than the recent trend. If it’s trading lower, it’s the opposite. It’s truly that simple. To play it, though, there’s one caveat. You need to make sure there’s enough volume first and foremost (not a clear level here, but just multiple millions of exchanging hands). Then, you put the VWAP on your chart (search indicators on your favorite way to view market day, like Yahoo! Finance) and watch closely. If there’s a wide-spread break moving in either direction, it usually signals a breakout in that direction. And all you need to do is buy it (or short on the downside, but you don’t need to) right there. In the above chart, you see the large bar breaking on the blue line to the downside, and the stock moves down. Stacking up an options strategy using one ticker once a day Next to volume, you want to make sure there’s volatility - it’s a “bad” word, but it also just means prices are moving, and prices need to move to make money. Take a look at the S&P’s volatility index, the VIX, below: The level jumps when the overall S&P is more volatile. It’s only natural then that it’s also known as the “fear gauge.” Stock prices typically fall when the VIX appreciates. But profiting during volatility isn’t easy. It requires stringent focus and following rules to a T. Otherwise, prices will reverse and you’ll end up down before you even knew you were up. And one of the best methods you can use to aim to profit on any given day is [right here](. We call it the Daily Double because it’s just that - the aim is to show you the opportunity to double your money starting at 2 p.m. every day. First, there’s an “impossible” pattern set up - [find it here](. Next, you need to locate four points for the trade (and this is on a single ticker day-over-day). Then, it’s about finding the direction. To do that, you need to find a “secret” trade that can predict which direction the market could move from bigwig traders at the Chicago Board Options Exchange (CBOE). Once you find that, [the Cash Zone is identified](. And then, it’s game on. Rinse, recycle, and repeat. [Click here to check out how to implement this yourself](. Sincerely, Rob Booker You are receiving this e-mail at {EMAIL}, as part of your subscription to Trading Today. To remove your email from this list: [unsubscribe here](. To cancel, or for any other questions or requests, please contact our Customer Service team: [Online]( Phone: 888-384-8339 (North America) 443-353-4519 (International) Mail: Trading Today | Attn: Member Services | 1125 N Charles Street | Baltimore, MD 21201 Fax: 410-622-3050 Our Customer Service team is available Monday - Friday between 9:00 AM and 5:00 PM ET. © 2022 Money Morning LIVE. All Rights Reserved. Nothing in this email should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. 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