Is this the beginning of something super nasty or near the bottom of the bear market?
Since the peak, the market has dropped over 25%. During the GFC the market dropped 25% in 7 days and fell a total of 57%.
So if we look at it that way then we still have way too much room for significant drops.
To top that up, we are in a situation where we have high inflation and pension funds in terrible conditions. If the Fed allows the pension funds to collapse the baby boomers will lose their pensions. It would be an absolute disaster so just like in England, the Fed at some stage will also have to flop and introduce another quantitative easing instead of fighting the inflation.
Where does this lead us?
The stock market fall will potentially stop or at least slow down but we will have even more inflation.
So is this the end of the bear market?
I don't think so.
So what's my trade for today?
Despite being bearish I am still comfortable taking a risk with a naked put against #MS (#MorganStanley) at $70 expiring in 2 weeks.
MS Daily Chart
Trade Type: Short Put
Expiry: 14 Oct
IV Rank: 70.9
Cap Req: $705
Annualised Prof at Expiry: 185%
IMPORTANT: Studying previous trades provide the opportunity to everyone to learn a great deal so I encourage you to click on the links below and digest the info.