Here is the market going to crash and what you can do about it? There are active steps that traders and investors can take in order to protect themselves as much as possible. Obviously there isn’t a foolproof strategy, but that doesn’t mean that you have to sit on your hands and wait. So you will definitely want to watch this video to get some ideas of things you can do in a market downturn. So first we’re going to be talking about the indications that we’ve talked about before why they are playing out now. Why? I think that there could be some toppiness or frothiness in the markets. It does not mean that we’re headed towards another bear market in the short term, and then we will get into some protective measures and trades that you could do right now. I will give you a bunch of ideas that that i have that we’ve implemented in our private trading group as well, so you definitely want to stick around for that. Welcome back to the traveling trader. If you get anything out of this video leave it a big fat thumbs up just like this leave it in the comment section below. Let me know which one of these strategies you are employing or what you are doing, even if it’s different from what i’m describing here, let us get right into it. So is the market going to crash. I believe that there will be some short term blood in the streets.

It could be in the form of a pullback or most likely, a correction which we have not seen in both the s p, 500 and the dow jones going all the way back to last year. We did see a correction in the nasdaq, but not in those other two big indus indices. So if you take a look at the s, p 500 you’ll recall from one of the videos that we did earlier this year way in the beginning of the year that the second year of the bull market usually net around a 17 gain. On average, the s p 500 is already up 18 just this year alone. That means that we already beat the index average for year two of the bull cycle. If you take a look at the 10 year bond, note you’ll see that we are at major support here. Obviously there was this dip back when the covet crash was at its peak. However, we are now at long time support going all the way back to 2012. So if you do expect a bump from here, then rising yields will likely result in lower stock prices. The fed is likely to start tapering soon. Now this is not likely to happen until later this year, but the fact that they’re starting to talk about it is an indication in and of itself. It means that the strong economy that we expected post pandemic is actually here and the need to uphold the markets by buying large amounts of bonds is not necessary anymore.

However, with the fed tapering, the buying of bonds and assets, that means that these things are left up to market forces and the free market itself, and without this third party swooping in and picking these things up in large amounts, it means that there could be a Chance that these bonds won’t get bought, meaning the yields will go up, meaning that is bad for stock prices. In the short term, you have analysts like morgan stanley and blackrock, saying that the reopening momentum is peaking again, how much higher could these stocks go while there are still beaten down industries that would benefit from a full reopening which would likely be towards the end of The year and maybe into 2022, so things such as travel lodging etc, while there’s still some value there. Most stocks are already beyond where they were trading, especially according to their earnings. Multiples. Goldman sachs said that in the next six months, prices are likely to decline then to rise. Now that is my view as well. I don’t know if it’s six months, though, however, the period between july and september is usually a very slow period in the markets. In general, you do see a little bump in july because of july 4th. However, we did see that little bump in june. So, who knows if that now precludes that bump that we usually see in july, regardless august and september, are usually terrible months for stocks and if we’re saying that the economy is peaking now, and you add that into the equation, that means that we are likely to See a downturn in the next few months now this is not all for not.

You do want to see these pullbacks, especially for those who have not had a chance to buy valuable quality stocks on the dip for discounted prices, and we will get into the plays in a second. I promise you, but in short, every major analyst house, from goldman sachs to city, to morgan stanley to blackrock is saying that the economy is likely peaking here in the next few months and we will likely suffer from something called demand. Destruction where the demand during covet was so high, due to stimulus, as well as other factors for things such as housing, cars, etc. That really, there isn’t any more room to go up from there and what we will likely experience is a downward shift in the demand curve in the direction of lower demand for these commodities all right. So, if you’re a fan of this channel, what are some things you could do? What are stocks to buy now? What are some of the moves that you can make from a stocks and an options perspective in order to protect yourself? Well, if you look at the trade alert on buying spy puts from yesterday, i sent this yesterday at the time of this recording saying that i’m buying the 432 put on the spy expiring july 23rd. And if you take a look at the stock futures i’m recording this during pre market, it looks like the s. P. 500 is down one and a half percent, actually almost one and a half percent all across the major indices.

That is, for all intents and purposes, a bloodbath. Now am i clairvoyant no, but there are certain indicators that we use as technical analysts to try to protect our portfolios. So there have been times before where i have bought spy puts as a hedge and the spy. Actually kept running up now, here’s the trick with hedges when you hedge right, whether you’re buying spy puts whether you’re buying qqq puts, which is puts against the nasdaq etf, whether you’re buying inverse etfs like the spxs, which is something else you could do or the sqqq, Which is something else you could do it’s very important not to size that, like a main position. So if i have a certain s, p based portfolio or a nasdaq based portfolio, i will open a hedge that is about one percent, to five percent of my total portfolio value for that index. Now, if all you’re holding is stocks like bingo and nano dimension and woozy and fubo and you don’t own any apple or tesla or microsoft or amazon, etc, then you don’t even need to hedge, because your portfolio is not adequately sized. According to my point of view, so that is one of the first things that i would do is engage in a hedge either buying puts against the spy the qqq buying inverse etfs like the sp xs or the sqq. You can also buy calls on the volatility index, which is the vix vix, which right now is just going to pop into oblivion.

If you bought calls on the vix, you are likely doing very well today and if you want access to all of our trades, including all of my hedges, like the spy put like the vix calls that we buy, like the tlt puts link, is in the description Below be a part of the community, you want to educate yourselves by engaging with a great group of traders that we have. We have thousands of traders in the group and i’m happy to call each and every single one of them a family member, because we are constantly learning from each other every single day, all right. So what is another thing you could do besides buying hedges? Well, you could sell calls against your shares if you look here. That is something else that i sent a trade alert for on stocks like amd, ttd, etc. We sold calls against amd because we saw amd peeking out at close to the 100 mark, so we ended up selling covered calls against our shares in order to protect ourselves against a downturn. Now, what is the worst that can happen in a covered call situation? Besides the stock tanking, obviously, but in that case, even holding the shares, is you’re going to feel that right. What is the worst thing that can happen? Well, it’s that your the stock goes above your strike price and you get your shares called meaning. You have to sell your shares, but you’re selling them for a major profit, especially if you bought the dip on amd like we did, because we bought it in the 70 range and we are going to be selling it for 100 plus.

If we get our shares called in this case, amd stock price is dropping and we are now making money on that short call and not just sitting on a bunch of shares of amd that are losing value. I also did this against peloton. Yesterday i sold the 130 call against peloton as you see here now. Another thing you could do if you want to buy stocks on the dip for cheap, is sell cash secure puts, i did a whole video on cash. Secure puts. I will link it here, but basically, when you see a stock drop to a major support level and if you’re a fan of this channel, you know that we do this routinely on tesla when tesla drops, especially to the as of recent times to the below 600 Level we end up selling the 450 put on tesla, which is free money, i’ve never been assigned on this. Now, if you are assigned, then you are going to be buying a hundred shares of whatever stock. You pick to sell cash. Secure puts on you’re gon na be buying a hundred shares of that, but at the price that you want at the price that you sold the cash secured put for, but go back and watch that cash secure, put video. That is another idea that you can deploy in a down market or a stagnant market. Now one last thing you could do is buy protective puts so let’s just stick with tesla, but if you own a large amount of tesla here – and you are expecting there to be a downturn right, you can buy, puts again keep your shares.

If you don’t want to sell them, especially for tax reasons, you can keep your shares and then buy puts against tesla so that you’ll make money off of those puts, but remember just like with the hedges you don’t want to make that a main position. So if you have a five thousand dollar tesla position, you don’t wan na have a five thousand dollar put position on tesla. You will likely keep it to one to five percent of your main tesla position, because if you are wrong on the hedge, you don’t want to lose your shorts basically now in terms of what stocks to buy i’m still looking at travel stocks. Because, as i said, this is one sector that has not recovered fully. If you look at the jets etf for years, it was trading between the twenty seven dollar and thirty. Two dollar range we’re, currently at twenty three dollars sitting at the two hundred day, moving average. It is oversold on the mfi oversold on the rsi as well. I like jets here, even if it keeps falling you’re, still getting jets at a discount. If you are a long term, investor you’re not worrying so much about the day to day another stock that i like i’ve mentioned before is wba walgreens boots alliance, anything that really has a major overreaction, especially on good earnings and it’s sitting at a major support level. This is in the retail sector as well or retail pharmaceutical, but really again part of the full reopening still trading well below where it was trading before the pandemic.

Now on blue chip stocks, which i am an advocate of maintaining most of your portfolio in blue chip stocks, in my view, you can wait here – there’s no reason to buy apple at 143. The point is: if you look at the top grow stocks, the mega cap grow stocks. In my view, you could afford to wait to see a pullback here if you’re not already in it, there’s really no reason to invest in it. In my opinion, and then, lastly, if and when we do see a correction on the major indices, mainly the dow jones and the s p 500, since we have not seen corrections on those yet and remember it, doesn’t mean that a correction has to happen. It is just likely that we see some sort of pullback within the next two to three months because of the factors and the indicators that i talked about at the outset of the video. But when you do see these things at major moving averages, whether it’s the 50 moving average 100 moving average you can buy these indexes. The dow jones index is called dia. The s p index is the spy. Obviously, the nasdaq index is called the qqq, but just having these index funds in your portfolio, especially if you’re holding most of your portfolio in these quality index funds, can be a lifesaver. Instead of trying to gamble on penny stocks and risky stocks left and right. As i said, the s p 500 is up 18 this year.

That is not anything to sneeze at so back when the dow jones was near the 100 day moving average. I added some to my portfolio same thing as the qqq. Once we saw that correction that we saw back in march as well as in may of 2021, this was a great opportunity to buy on this double dip here same thing with the spy right. If you take a look at the spy, it also hit a major moving average hitting the 50 day moving average constantly. So you can buy on these major moving averages. Oh wow, the spy pre market is at 429. Remember we bought the 432 put. Those should be up tremendously at market open and, lastly, as i wrote in my market update here from a few days ago, i’m stressing that people take profits sooner rather than later, we had tons of option, plays xlf, walgreens, gm, etc. All of these were up at a certain point. However, if you just held them until expiration and didn’t pay attention or manage your position, you would have ended up in a losing position and in my view, in this type of market scenario, i am much much quicker to take profits than before. In 2020. You can almost hold every spread until expiration, especially because we were in the middle of a violent bull rally in this market scenario, if i’m up 25 i’m taking profit if i’m up 30 i’m taking profit. I don’t thumb my nose on that, because that 30 profit can easily turn into a 50 deficit if you just held it until expiration, and you risked your entire portfolio to the violent market conditions that are that exist currently anyway, traders.

That is it for this video. If you learned anything, if you got anything out of this video, if i shed some light on any new ideas that that you might not have had before, leave it a big fat thumbs up just like this leave it in the comment section below, let me know Which one of these strategies you are planning to employ, or which ones you’ve already employed subscribe to the private trading group? If you want access to all of our ideas, the chats etc? Our wonderful group of thousands of traders subscribe to the channel hit that notification bell stay safe out.

https://www.youtube.com/watch?v=g1g0PfmX8qM