If this bear market keeps going like how it has been going over the past few months then I believe everyone should be happy.
This may sounds strange as most people lose money in bear markets because all they know is buying a stock and hoping that it will go up.
However, a slow and steady downwards trend gives everyone the opportunity to get out of risky positions and go to safety.
But what's safety?
That's a difficult one to answer in today's world as the central banks have totally destroyed the market economy. We currently have large inflation around the world, collapsing property, stock and bond markets and the traditional hedges, like precious metals, aren't working either.
What's the way out?
The only way I can see is the return to the Gold standards and the complete abolition of quantitative easing and other central bank measures that created the asset bubbles. But unfortunately that won't happen as millions would lose their pensions and savings, which would lead to a complete social collapse.
I believe that the Fed is going to stop raising interest rates and recommence quantitative easing, which should place a bottom on the stock market.
So what's my trade for today?
#GDX (#GoldMinersETF) strangle. The price has been range bound for some time and hopefully it will remain like that for the next few weeks. The IVR is high so the premium/capital ratio is very attractive.
GDX Daily Chart
Trade Type: Short Strangle
Strike: $21 / 28
Expiry: 18 Nov
IV Rank: 69.1
Cap Req: $240
Annualised Prof at Expiry: 300%
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