The World’s Worst Bear Market Begins Now?

Let’s take a break from the election insanity this morning…

Instead, I want to talk about why I believe we could experience a “melt-up” move in the markets heading into 2021.

I know that might sound crazy – especially if you’ve been paying close attention to the financial media. The pundits have caught election fever, and they’ve somehow tricked themselves into thinking the market’s performance hinges solely on whoever happens to reside at 1600 Pennsylvania Avenue.

In fact, some well-known market pontificators are calling for huge crash!

Just before election day, legendary commodities trader Jim Rogers exclaimed that the next bear market is “going to be the worst in my lifetime.”

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But here’s what they don’t tell you: Rogers made this exact same prediction more than three years ago… using the exact same language – the worst crash in a lifetime

I’m not so sure about these perma-bear’s calls for a world-ending disaster in the markets. In fact, I think we have a better chance of a melt up than a meltdown.

With everyone bracing for a crash, the market is more likely to defy the critics and continue to climb the wall of worry. We had our crash at the very beginning of the pandemic. Now is not the time run scared from the market – it’s time to search for opportunity.

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Trading Tip of the Day: How to defeat the political noise machine

Greg Guenthner

A hotly-contested election has some difficult trading moments — even for seasoned traders.

Yes, we can use volatility to our advantage in many situations. But choppy market action can make entries and exits a little more difficult. In fact, I’ve seen many novice traders lose more money in a sideways market than one that’s in freefall…

Thankfully, there are two things you can do to come out on top, even when the market’s not fully cooperating with your plans. First, you can trade smaller. Buy half of the shares or contracts you normally would for any given position. That way, the market’s choppy action is less likely to shake you out of your position.

Next, you can adjust your timeframe now that you have a more appropriate position size. Giving your trade time to work will help you capture more predictable moves, instead of attempting to snipe unpredictable intra-day moves.

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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