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This Number Will Tell Us When the New Bull Market Is Here

By Dustin Parrett, Money Morning - April 3, 2020
You're going to be hearing a lot about bull markets in the media.
The Wall Street Journal was quick to label last week's 21% gain the start of a new bull market.
But as much as Wall Street wants to see a new one start, there won't be a bull market until we hit this key number...

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This Number Will Tell Us When the New Bull Market Is Here

By Dustin Parrett, Money Morning - April 3, 2020

You're going to be hearing a lot about bull markets in the media.

The Wall Street Journal was quick to label last week's 21% gain the start of a new bull market.

But as much as Wall Street wants to see a new one start, there won't be a bull market until we hit this key number...

Where Stocks Are Headed Next

By Tom Gentile, America's No. 1 Pattern Trader, Money Morning • @powerproftrades - April 3, 2020

When you're stuck at home day in and day out, your thoughts tend to wander. And mine have been stuck on this market.

We're more than 20% down from recent market highs - the flat-out definition of a bear market.

But at the same time, stocks have begun to rally. As I'm writing, we're around a 20% retracement from recent market lows as well.

Now, typically, I wouldn't buy this rally. But it's definitely testing me...

Are we in the midst of a bear market or a bull market? Each side has a solid argument backing it up - so today, I'm using three charts to show you where I see stocks headed next...

Pinpoint the Market Bottom with These Three Indicators

By Tom Gentile, America's No. 1 Pattern Trader, Money Morning • @powerproftrades - March 31, 2020

The only thing that's kept markets above water since the coronavirus took hold of the globe has been the $2 trillion stimulus package.

The three-day jump in markets was exciting, but the "stimulus overdose" did not last.

On Friday, the market's three-day rally ended on news that the U.S. now led the world in highest number of coronavirus cases.

Then Monday, the Dow rallied over 600 points - about 3% - on a few "good" news items. However, with the Dow down Tuesday, this sentiment isn't sticking.

Instead, hedge funds and money managers got a second chance to "rebalance" their portfolios by cutting risk.

The week of upward movement was simply a swapping of securities from institutions to the retail public.

The up-and-down leaves us with the question of when we hit market bottom.

Everyone has their strategy to figure out how to tell - and these are the three indicators our Tom Gentile is glued to...

How to Trade This Market Volatility in 3 Simple Steps

By Money Morning Staff Reports, Money Morning - March 30, 2020

Stocks have been moving dramatically nearly every day.

The Dow Jones Industrial Average saw a three-day bull run last week, from around 18,000 to above 22,000.

The next day, it fell 700 points.

Who knows where it will be this week?

While this volatility hasn't been great for many 401(k) or retirement portfolios, Money Morning's options trading specialist, Tom Gentile, sees an opportunity.

He has an options trading strategy to help you cope with high volatility and high options prices.

Read more...

These Five Signs Will Show When Stock Markets Are About to Bottom Out

By D.R. Barton, Jr., Technical Trading Specialist, Money Morning • @DRBarton_Stocks - March 30, 2020

Last week gave hope that stock markets had found a bottom, with a three-day rally that brought the Dow up over 20% from Monday's close through the end of Thursday's session.

The Dow rallied more than 6% on Thursday to post its biggest three-day gain since 1931.

After all of the doom and gloom over the last few weeks caused by the coronavirus outbreak, people are desperate for any good news, and investors are eager to find a floor to the market.

But it's that bias that may be causing a Reality Gap between what people are hoping for in the market and what is actually happening.

In fact, stocks fell sharply on Friday, giving back some of the previous three days' gains on news that the United States has now become the country with the most confirmed coronavirus cases.

So the question remains: Are we at the bottom? And what will tell us that the market is making an investable bottom - one that will hold for more than a week or two?

For that, we know that the exponential spread of the virus itself is the primary problem. But with an estimated 1 billion people worldwide now under some sort of advisory to stay indoors and limit social interaction, fear and anxiety is taking a huge psychological toll on people.

The economic consequences of it all are clear to see. At its lowest point, the Dow was down 37% from its peak.

But have no doubt. We will get through this.

Here are five clear signs our D.R. Barton's looking for to identify when the markets will bottom out...

Help Your Country and Your Portfolio with These Three Bond Plays

By Tom Gentile, America's No. 1 Pattern Trader, Money Morning • @powerproftrades - March 28, 2020

Suffice it to say, this week's market rally has been a welcome respite from a month-long (though it feels longer) market free fall. But it's important to keep things in perspective.

While the market might continue its rally for a few more days, I wouldn't be surprised if it doesn't stick. We've entered a bear market environment, and any rallies we see from now on like we did this week will most likely be followed by severe drops. Especially as we get more news on growing infection numbers and a suffering economy.

And that's why I wanted to take a moment to talk to you folks about one of the perfect plays for a bear market. This will keep you ahead of the volatility still to come.

You see, bonds often get a bad rap.

A treasury bond is a government debt security that you can buy and sell just like a stock. But it offers lower yields, making it a much less attractive investment.

What many people don't know is that bonds are actually a vital source of revenue. They help to keep the lights on for governments, states, and corporations...

And they offer an ideal safe haven in bearish market conditions.

With all three major indexes down more than 20% from their recent highs, markets have officially entered bearish territory - making now the perfect time to get into bonds.

You don't have to worry about lower yields, either.

With bonds, you can come to the aid of your country, profit from rising prices, and dramatically increase your annual returns... Full Story

One Simple Strategy to Protect Yourself from Market Losses

By Chris Johnson, Quantitative Specialist, Money Morning - March 26, 2020

Bear market rallies happen; it's part of the process.

That's the message that you should hold onto through the past two days' rip higher in the market.

I remember the first set of rips and dips in 2007, when the market turned mean. The first three months saw a series of rallies and sell-offs that were both good and bad.

Good, because these fits and starts gave the nimble traders the opportunity to operate in their natural environment. Increased volatility, short-term trends, and a market that is more in tune with the technicals. It's a haven for quick and recurring profits.

Bad, because the roller coaster ride of a market kept the longer-term investors guessing as to whether they should put some money to work or not. That question got harder to answer with each trip higher that ended the next move lower.

Investor behavior in a bear market hasn't changed in decades. Most are trained to try to nail the bottom and then hold on as the rally takes them for a long bull market ride. This isn't normally the case, as they will often buy "a" bottom and try to hold only to find out that the bottom they bought was wrong and they're losing more money.

In between those tops and bottoms, we all tend to decide that we want to buy or sell a stock. Inevitably, the mean market volatility leads to the following fun situation...

These 5 Signs Will Show When Stock Markets Are About to Bottom Out

By D.R. Barton, Jr., Technical Trading Specialist, Money Morning • @DRBarton_Stocks - March 25, 2020

Tuesday's market open is giving hope that the market might be able to find a bottom.

As I write this Tuesday morning, there are hopes that Congress can finally agree on a fiscal stimulus package that will help Main Street and not just big companies and Wall Street.

And the White House is pushing for a quicker return to work for many Americans should progress on containing the spread of the coronavirus warrant it.

The big question I'm hearing, and have been hearing for weeks, is this - Are we at the bottom of this historic market drop?

Read more...

The Do's and Don'ts of Trading Through a Recession

By Tom Gentile, America's No. 1 Pattern Trader, Money Morning • @powerproftrades - March 25, 2020

Never in my lifetime could I have imagined an event like this.

Just a few months ago, COVID-19 hadn't even been named. It was simply considered a different strain of the flu. Today, it's a worldwide pandemic that has taken over the globe, eclipsing tragedies and disasters like 9/11 and the financial crisis of 2008.

Based on the numbers coming from the Centers for Disease Control and Prevention (CDC), this pandemic should run its course by the end of July if it continues on its exponential trend.

But that's more than three months away. And already, at its lowest, the market fell 37%, breaking all the wrong kinds of records.

Trading has been halted multiple times. Stocks have seen their worst days in history. People everywhere have lost a ton of money.

Yesterday's bounce was welcome - but we're not in the clear. If the CDC has anything to say about it, we're just getting started. We could be dropped into a recession any day now, and the panic is evident in the up-and-down movement of the market.

The word "recession" is scary. But it's not the end of the world - not even close. In fact, you could come out of it even stronger than you were before.

See, the stock market is typically two to three months ahead of everything else. If the pandemic lasts through July, then I expect the market's bottom to hit by the end of April.

Now, the move higher from there will be slow. It could take until the end of the year before the market begins to rise significantly. But don't wait around - there's a lot you can do until then... Full Story

The Top Six Stocks to Trade During This Global Pandemic

By Tom Gentile, America's No. 1 Pattern Trader, Money Morning • @powerproftrades - March 23, 2020

The world has declared war on the novel coronavirus, COVID-19. And the markets are in a full-blown tailspin as a result.

In less than one month, all three major indexes shed more than 20% off their recent highs - making it the fastest we've ever entered a bear market. Portfolios are being drained of cash.

But not every stock is crumbling under the weight of the coronavirus. Today, Tom's going to show you six stocks that are still standing - and they're the only place you'll want to put your trading money right now...

What to Do When "This Time Really Is Different"

By D.R. Barton, Jr., Technical Trading Specialist, Money Morning • @DRBarton_Stocks - March 22, 2020

We haven't seen anything exactly like this before.

And while a once-in-a-lifetime trading and investing opportunity will follow, what will happen first is a series of ugly events.

Because you can't solve this "pandemic problem" with a "financial fix."

Read more...

How to Navigate the Four Corners of This Coronavirus-Driven Market

By Tom Gentile, America's No. 1 Pattern Trader, Money Morning • @powerproftrades - March 20, 2020

The last time I spoke with you folks, I told you about three different things that you could do - and that I'm definitely doing myself - in the midst of a world crisis like the coronavirus:

1. Risk less - around the office we have a saying, "Trade small, trade often," and there's a reason for that. Trade small basically means small risk, but also, trading often means we're able to diversify ourselves into many different things, both bullish and bearish.

2. Look for things that go up in a down market.

3. Exploit volatility when it comes to options - boy, have we got volatility here now.

Now, I wanted to take a few minutes with you to show you how I assess these markets.

I divide the overall market into four grids because wherever the overall market is going, chances are, your portfolio's being affected in one way or another. Specifically, I watch four key areas - the "four corners of the market" - to tell me what's going on, and the right action to take... Full Story

This Will Be a Generational Buying Opportunity

By Shah Gilani, Capital Wave Strategist, Money Morning • @WallStreet_II - March 19, 2020

The stock market hasn't hit bottom, but it's going to.

If you knew when that was going to happen, and you had money to invest in stocks, you'd make a terrific amount on the initial bounce and easily double, triple, quadruple, or quintuple your money in the next bull market.

The truth is you don't have to know exactly when the bottom's in to make a fortune (but I will tell you when it is). You just need to know that you don't want to miss that first bounce up, and I can help.

Here's why this is setting up to be a generational buying opportunity, how to buy stocks on the way down so you get into them near the bottom, and when we'll see the bottom... Full Story