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There's a lot to be bullish about, despite the headlines, or whether we're in a "second wave" of the coronavirus or if we're not done with the first wave.
If you have a long-term view of stocks, you almost have to be bullish.
The markets have an upward bias that's tough to deny. From the entire period between 1960 and 2019, the S&P 500 has returned an average of 11% – that includes reinvested dividends. In fact, the market only declined in 13 of those years, increasing in the other 46.
In 2020, we've seen markets come roaring back from the March "COVID Crash," and the Nasdaq Composite has even made new all-time highs.
There are trillions of dollars in stimulus sloshing around the markets, like a Labrador in a kiddie pool – everybody's getting wet. Interest rates are as low as they've been since 2009, and they're likely to stay that way for the foreseeable future.
I like the odds of more stimulus, too. The president clearly thinks of it as essential for his reelection in November, and putting cash in everyday Americans' pockets is politically popular, right to left, across a chunk of Congress, too.
That said, as traders, we have to deal with the here and now.
And, while I'm not betting against the markets in the long run, this month my proprietary Money Calendar is flashing a lot of bearish signals that indicate a lot of stocks will be heading lower. Those signals are backed up by the technicals, too.
I'm here to tell you: No need to worry. In fact, I'm pretty excited.
I'm going to make my case for switching to bearish trading. When stocks slide, the profits can be bigger and quicker than when they're going up…
About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.