Dominate Market Volatility: How to Adapt to the New Market Environment

Sell in May, go away. Right now a number of global news catalysts are bringing the major indexes and individual stocks.

While we are seeing a decent pullback in the indexes, individual stocks have been getting CRUSHED.

SPACs. EVs. All the fan favorites. It’s time to adapt or perish.

In my latest video lesson, I’ll break down how to adapt to this volatility, what strategies are working right now, and what stocks and sectors you should be watching:

What Is Working Right Now

You need to have a nimble bias. On days we gap down big we have been rebounding. But the next day we give it all back. The major indexes are not out of the woods yet.

What I have been telling all my students: Sit out the first 15 minutes, or trade with smaller size. Wait for trends to form and confirm. Getting on the wrong side of a trend and not managing your risk will have disastrous consequences in these market conditions.

Every year the market rotates. You cannot get attached to sectors and stocks. Nothing stays in play forever. Our goal as momentum traders is to find sectors with trend and liquidity.

Stop Bagholding

There are record numbers of retail bagholders in stocks right now. So many retail traders are underwater in EVs, SPACs, and the sectors that were hot last year. Right now these sectors are dead. There is no point in tying up your hard-earned capital in companies that are getting destroyed. Take the loss, and rotate your capital into stocks that are trending.

Commodity Plays

One of the strongest sectors right now is commodity plays. With inflation going through the roof, precious metals and commodity plays are going to the moon. Stocks like $FCX have been on monster runs, and are offering some of the best swing trading opportunities right now.

Run sector scans in TC2000 every day. I run 30-day sorts to quickly identify strong sectors, and then pick out the strongest stocks in these sectors (Click here to get my TC2000 scans if you want them).

Shorting Tech

Tech has been seeing an insane sell-off. The theme we discussed earlier continues in the tech sector: FAANG and the $QQQ are seeing a correction, while all the growth names are in a straight-up bear market.

Keep shorting rallies and fading strength. One of my favorite strategies to use on these names is the VWAP fade. Make sure to watch the video lesson above to learn how I have been using it on these names. Be patient for your entries, don’t chase weakness, and add to your winning trades!