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Despite a truly horrifying unemployment crisis, the oil market being thrown into chaos, and several industries on the brink of collapse, many groups of stocks have managed to prosper in the face of coronavirus lockdowns...
The financial sector isn't one of them.
Unfortunately, in times of financial crisis, these are the stocks that drag down the larger market. This has been made clear in Financial Select Sector SPDR ETF (NYSE: XLF).
The XLF maintains holdings in a wide range of S&P 500 financials, representing a true cross-section of the industry. Basically, this index has a reliable pulse on the state of U.S. financials.
Over the last few weeks, the XLF has really taken a beating... and we're not just talking about the 43% plummet from February highs. Even during the gradual recovery (if you can call it a recovery) from its rock bottom in late March, XLF has struggled to exceed even the shortest-term moving average.
We think it's safe to say there will be no swift recovery for the banking industry.
That's why on this latest issue of Fast Profits with Money Morning, special guest Chris Johnson is offering a play on his bearish outlook for financials.
He's not only covering a way to cash in on the downside of the lagging sector as a whole, Chris has also concocted a trade recommendation to rake in even bigger gains as one of the biggest-ticket holdings in the XLF braces itself for a free fall.
Here's Chris with the full details...
How to Turn Volatility into Opportunity
Action to Take No. 1: Buy shares of ProShares UltraShort Financials ETF (NYSE: SKF) using a limit order of $16.50.
Action to Take No. 2: Buy to open BAC Aug. 21, 2020 $22 puts (BAC200821P00022000) using a Good Til Canceled limit order of $2.25.
If you've traded on Chris' limit order recommendations before, you know that this trading hack is the key to getting the best price in these wild markets.
Right now, stocks are more volatile than ever.
So if you get into a trade at whatever the price the market's willing to offer, you could be paying through the nose on an upswing... only to lose your shirt on the pullback.
We've seen it a thousand times before.
But with Chris on your side, you don't have to fall into a faux-rally trap. With decades of trading experience under his belt, Chris knows when a "discount" window is about to open up. And with his limit order recommendations, you can take full advantage of the drop, instead of missing out on profits.
But this isn't the only trick Chris has up his sleeve...
He has a system he's developed over 30 years of professional trading - a complete roadmap to profiting in any market.
Every day at 11 a.m., Chris takes his readers into his LIVE trading room, where he guides them through some of the most profitable opportunities he's pinpointed. With a daily briefing from Chris, you could cut through the noise of dead-end investment "news" and get right to making money.
This way, when something is happening in the market, you can know exactly what to do, and where to do it, instead of diving head first into a crowded trading frenzy, full of inexperienced traders all reacting to the same headline.
And there are plenty more chances where that came from to double or even triple your money.