I'm not one for making predictions. But today I am making one.
Here's my bold prediction: the market will either get back on it's uptrend, breakdown or trade rangebound, and it will do one of these things over the next three months to three years.
I know what you are thinking. Not much of a prediction, huh?
That's because nobody knows what is going to happen. The Coronavirus Bear Market is unprecedented, although we do have some historical templates to pattern help develop a strategy.
As Charlie Munger famously said, "Acknowledging what you don’t know is the dawning of wisdom."
So let' exhibit some wisdom and make it clear we have no idea what's next. Now what do we do?
We study the past.
By analyzing analogous bear markets of the past, we see potential futures for our current market. Patterns start to emerge and we see similar things play our in every past bear market.
In our recent Bear Market Course, I laid out a plan for 6 different potential futures for the current "coronavirus" bear market. These futures were derived by doing a deep dive into the six biggest bear markets of the past 100 years.
- The Spanish Flu
- Great Depression
- Nixon Era Energy Crisis
- Black Monday
- Dot Com Bubble
- Financial Crisis
By studying these bear markets, we discovered some interesting patterns. From those patterns, I've developed watch-lists in the following areas:
- Beaten down stocks
- Relative strength stocks
- New economy stocks
- New Economy and Financials
While we do not know what will happen, we know every bear market ends, and stock from these five different areas will give us tremendous opportunities. In today's video, I go over one stock from each of these areas that should be the centerpiece of every swing trader's watchlist.
Watch Our Analysis of These 5 Stocks During COVID-19 Below
If you want to learn our process behind swing trading stocks during Bear Markets, feel free to checkout our Bear Market Swing Trading Course here, a 5-part trading course designed to show you exactly how we have been swing trading here in 2020, as well as previous bear markets in the past.