By: Tom Gentile
on June 21st, 2022
The markets have been in a sell off all year so far. There have been many times where the markets will see a bounce higher in price and the financial news networks and online blogs will light up with headlines questions like, ‘Is this the Market Bottom?’ or ‘Has the Market Finally Bottomed Out?.’
There is always a chance the recent bounce is going to be the bottom, but if you want to try and pick the actual bottom, or top for that matter, in the markets it will be a very costly endeavor.
I have written and provided an image in a prior educational article how it may be prudent to miss the bottom, see the markets bounce and then retrace and form another low pivot point, but if it is a higher low that may be the better technical pattern setup to trade.
The Markets Can See Bullish Rallies in a Bear Market
That is what is called a bear trap and I have written about this before. It is where the markets can bounce higher and get folks thinking the bottom is in, the financial news networks light up with the headline questions, and the talk is the bear is over, ONLY to see the markets be the ones that roll over once again and take out prior lows that people thought was the bottom.
The market bounces could be a bit more substantial than some would think and the fact it bounces higher than some folks expectations it could further lull one in to a false sense of security.
Best to again wait for that pattern of a higher pivot low to form and miss the absolute bottom and thereby having a bit more of a technical setup backing up ones assessment it may be time to get long.
Whichever Assessment You Have Here Are The Morning Report Lists
The economy is not out of the woods. The aggressive stance the Fed has taken is likely to continue as they perform more rate hikes to battle inflation. You won’t see a call on how many more are to come, when they will come and how much they will raise. We will let the prognosticators do that and be prepared.
Market bounce and bull rallies in bear markets can run higher a good amount to make it worthwhile to place a bullish option trade out there with the intent to trade small, get a quick hit and then get out before the next potential drop.
If you feel so compelled to go after a bullish option trade we will leave that up to you and your broker, but for research purposes I offer you up the recent Morning Report Lists so you can see where my tools, (www.tomsoptiontools.com) show options activity based on the lists headline classification.
App: Toms Option Tools
Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.
Other times I will have other charts may work to amplify my educational points.
Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.
Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.
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You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.
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