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Important: Prepare yourself for the market's next downturn right here.
The S&P 500 is considered to be one of the best gauges of market movement. And from its all-time high of 3,393 on February 19, the index crashed 35% in a matter of weeks.
Since then, however, things have turned around. From its March 23rd lows, the S&P has mounted a 25% rise at the time of writing.
Investors are clinging to the bullish bounce, question after question floating through their minds…
Will the jump continue? Is the market bottom in? Is it time to load up on stocks?
For the answer, we look to the technicals – and they're shaking their heads from left to right. The recent run up has no staying power. Another down-leg is likely.
But you don't have to fear another bearish drop. This time, we know it's coming – and with the strategy I'm going to show you today, you could profit even more than if the bullishness were to continue.
In fact, this trade could hand you a 327% gain in two-months' time…
Use Inverse ETFs to Profit in a Down-Turned Market
The truth is nobody knows for sure where the market will go next. But you can gain an edge over other traders by looking at historical patterns. One of those patterns compares price moves to volume.
See, institutional traders account for the bulk of trading volume. Most estimate that they make up around 75-80% of day-to-day trades. And by looking at this volume, we can get a feel for institutional traders' level of conviction as markets move. Think of it like this:
Volume = "Institutional Conviction"
That means when volume on a move is high, so is the institutional conviction. It could be compared to a crystal ball, telling you where the market is headed next. And the best part? We can trade those volume spikes – even in today's volatile market. Click here to learn how.
With this distinction, a volume chart comes to life, increasing our ability to predict direction.
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.