Is it over?

your Strike Price issue Is It Over? [By Jon Lewis] By Jon Lewis Thursday, February 3, 2022 I got a question during my January 25th subscriber briefing about when I thought the current downtrend would end. After my typical response that I don’t have a clue when a trend will end – and neither does anyone else – I looked at my trading screen (it was around 3 pm) and added a somewhat cheeky “maybe it already ended.” The reversal that day was equal parts stunning and dumbfounding. I received a CNBC alert at 12:16 pm that said, “Dow falls 1,000 points in 7th straight down day as stocks head for worst month since March 2020.” Two minutes later, the rally was on. Talk about calling a bottom. The numbers are staggering. In less than four hours, the Dow gained more than 1,200 points, or 3.7%. Sounds impressive, no? Well, not when you realize the S&P 500 added 4.5%, while the small-cap Russell 2000 soared 5.3% after slipping into bear-market territory. But that’s chicken feed. The Nasdaq popped 5.8%! And the CBOE volatility Index (VIX) plunged 23% after reaching its highest point since October 2020. As you might expect, individual stocks posted even more absurd numbers. Tesla (TSLA) drove 9.3% higher. NVIDIA (NVDA) gained 11.9%. Closer to home, our open position on Darden Restaurants (DRI) closed the day 55 cents below its peak thanks to a 5.2% rebound. So, it that it? Is the misery over? Did the buy the dippers save the day and put markets on the road to recovery? Beats me. If you needed any more proof of how predicting the market is nuts, today is it. Sure, there are all sorts of explanations to explain today’s big bloodbath, from Facebook’s decline to geopolitical tensions. But I can guarantee you that nobody saw this coming. I don’t even try to make sense of it. The market does what it does. Predicting when a run will end – known affectionately as “market timing” – is something I want no part of. For me, it’s about playing probabilities, understanding that in times like these probabilities work less well. So that’s why I’ve stayed away from the craziness by keeping most of our powder dry. Big moves can blow past stop-limit levels too easily. I’ll still trade, though it will be cautiously. Go wider with strikes, move more out of the money, stay neutral. And as a reminder, keep those position sizes small. You want to be in the game when the market regains some sense of normalcy … whatever that is. Trade Wisely, [Jon Lewis] Jon Lewis [View this on WyattResearch.com]( [Take a 7 day break from these emails]( [Unsubscribe from these types of emails]( [Manage your email preferences]( [Wyatt Investment Research] Disclaimer & Important Information [Wyatt Investment Research (“WIR”)]( owns and publishes the website WyattResearch.com, other web sites, and, through its subscription services, various investment newsletters, trade alerts, and other investment-related educational materials. Those publications are informational in nature – WIR is not your financial adviser and does not provide any individualized investment advice to you. You should perform your own independent research on potential investments and consult with your financial adviser to determine whether an investment is appropriate given your financial needs, objectives, and risk appetite. This publication should not be construed as an offer to sell or the solicitation of an offer to buy any security. None of the case studies, examples, testimonials, investment return or income claims made on WIR’s website or through its services is a guarantee of any income or investment results for you. WIR does not verify the income or investment results claims made in customer testimonials. Results for other customers may vary; for typical results, please see the Testimonial Support Page, linked below. Past success is not a predictor of future success. Trading in securities involves risks, including the risk of losing some or all of your investment. Hypothetical or modeled portfolio results do not represent the results of an actually invested portfolio and are not back-tested for accuracy under actual, historical market conditions. There can be tax consequences to trading; consult your tax adviser before entering into trades. For additional WIR disclosures and policies, please click the links below. [Terms of Use]( | [Privacy Policy]( [Testimonial Support]( | [Financial Disclaimer]( [Trading Policies & WIR Compensation]( [Unsubscribe]( | [Delivery Preferences]( --------------------------------------------------------------- This is a communication from Wyatt Investment Research. You are subscribed with the following email address: {EMAIL} If you believe this communication to be a mistake, please e-mail abuse@wyattresearchnewsletters.com with details regarding your situation, and we will be sure to promptly investigate your situation. Wyatt Investment Research 65 Railroad Street PO Box 790 Richmond, Vermont USA 05477