[CHART] Here's How to Beat This Irrational Market with One Trade

Make no mistake: This is an irrational market right now. Stocks are hitting all-time highs while the Fed is all but predicting a recession.

The trade spat with China, tensions with Iran, lingering Brexit, and the Fed's next move are all giving both bulls and bears headaches. The good part of all of this uncertainty is that it creates tremendous opportunities for clever traders.

The important point to consider, whether the market is jumpy or boring, is that we make money by buying value and selling when that value is realized. Put another way, we buy low and sell high.

Don't roll your eyes at the overused market cliché. Even though it's easy to say, it's the essence of what we are trying to do.

And there's nothing like a jumpy, uncertain market to make that even easier.

You see, the irrationality leads to some stocks getting mispriced, creating savory opportunities for traders like us. That's where stock pickers can make a killing while the passive index followers get left behind.

Here's what's going on - and how you can make 200% gains off of one trade. Just wait until you see this stock's chart...

"Dow Theory" Holds the Key

More than a century ago, Charles H. Dow, one half of the Dow Jones moniker, laid out a theory about trends in stocks. If you know the major trend - in other words, if this is a bull market or bear market - you are way ahead of the game. All you have to do is select stocks that are in tune with that primary trend.

There is much more to the theory, but the part on which most investors focus is the interplay between the Dow Jones Industrial Average and the Dow Jones Transportation Average. If one of the averages hits a new high and the other trends up, then the market as a whole is trending up. After all, if companies that make the goods and the companies that move the goods are doing well, then the economy as a whole must be in good shape.

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But what's happened this time is different. While the Dow Jones Industrial Average just hit an all-time high this week, the Dow Transportation Average continues to badly lag. That's a hard pill to swallow.

That's a sign the market is a bit "irrational" right now. More importantly, it's a sign the transportation sector is facing a bearish trend that's being masked by the stock market's overall highs.

It just goes to show us that the market is a market of stocks and not a unified stock market. Some sectors can do very well while others struggle. And there is nothing wrong with making money on those sectors as they rise at the same time we make money on the weaker sectors as they fall.

That's exactly what we're going to do today with one of the best stocks to short.

We'll show you how to take advantage of the market's irrationality and cash in on the transport sector's slowdown.

And when you see this chart, you'll know exactly why it's such a big opportunity...

A Bearish Trade Opportunity

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The divergence between the industrials and the transports was not lost on Money Morning Quantitative Specialist Chris Johnson. In fact, he thinks that it's important for the buy-and-hold investor to start paying closer attention to their holdings.

With the transports lagging, Chris looked for the weakest stocks in this weak group and found that FedEx Corp. (NYSE: FDX) is set up for a fall. The one-time undisputed leader in package delivery has had a rough road with declining margins and falling market share. Competitors have been eating its lunch, and now drones threaten to cut into that further.

The latest headwind for FedEx has been the effects of the trade wars, which will ultimately, if unsolved, decrease international shipping volume.

Chris' proprietary model rates this stock as one of the weakest in the group, and he has a price target of $90. That's a 47.2% decline based on current trading at $170.53.

The technical condition bears that out, as well. The stock price peaked in January 2018, and it has been mostly down hill since then. That creates quite a major declining trend - and one that should be respected. Take a look at how drastic the trend is in the chart below...

To summarize, we've got a sector - the transports - that signals problems for the market as a whole. Then we have a stock - FedEx - that is clearly lagging the rest of the market with weakening fundamentals and a major bearish price trend.

You can take advantage of this by shorting the stock, but that's too risky.

Instead, look for reasonably priced put contracts several months from expiration. These will give you the upside potential without the infinite risk of shorting the stock.

For example, the Oct. 18 $115 put is trading at $27 a contract right now, giving you control of 100 shares of FDX stock. If the stock falls along the trajectory Chris projects, then the upside could be massive. If FDX falls below $140 a share on Sept. 1, you could be looking at gains of 200%. The potential gains are even bigger if the stock falls more. And all you're risking is $27 a contract.

But there are even more opportunities out there. If you want to learn how you can do this consistently, make sure to check this out...

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