In today’s trader tip video, Chris explains how to navigate the S&P 500 in a bear market. He takes you through the US Dollar ETF UUP and the natural gas ETF UNG both of which have been holding up well and look ready for a potential breakout run.
Volatility draws people in who are looking for big plays. However, the markets being so good at pulling money out of your pocket generally means that volatility can hurt you more than it can help.
The S&P 500 has been in a strong uptrend but flipped to red (risk-off) about two months ago. By following our strategy, we have been able to sit back and watch the markets decline without taking us along for the ride. Now, we sit in cash and protect our capital. Though this is not a position that a lot of traders like, once you embrace a cash position your stress levels go down and you end up saving money that can then be put to use once the markets stabilize.
Bear markets are traded a lot differently than bull markets. This is not a time to get fancy and try to put on a lot of trades, especially if you have not traded through a bear market before. It’s a time to protect your capital, educate yourself, and position yourself for good opportunities down the road.
TO LEARN MORE ABOUT HOW TO NAVIGATE THE S&P500 IN A BEAR MARKET WATCH THE VIDEO
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Disclaimer: None of this material is meant to be construed as investment advice. It is for education and entertainment purposes only. The video is accurate as of the posting date but may not be accurate in the future.
