Yesterday was absolutely brutal…

The Dow, S&P 500, and IWM were all falling down like a bowling ball off a cliff.

Traders everywhere saw nothing but red flashing across their dashboards.

And today I have one message for you.

Bend Don’t Break

When markets move like this, too often folks start making a run for the hills – trading their emotions rather than the technical indicators.

So come on and slow things down with ol’ CJ here.

I’ve got a little trade idea for you if you stick around to the end of this article!

But first…

On today’s edition of The Long and Short of It we took a look equity put call ratios with me from today.

Just the other day it shot all the way up past a 0.85 reading before taking a nosedive to the 0.63 level today.

This indicator helps traders like me gauge the overall market sentiment and where we are heading next.

And given that the market fell so steeply yesterday, I can safely claim that today’s falling put-call ratio, something that is normally a bullish signal, is nothing more than a dead-cat bounce.

With that, I think today is a uniquely good opportunity to grab a position in a particular tech giant which has been on my naughty list for a while…

Today’s top trade idea

Take a look here at good old Microsoft (MSFT)…

I’ve been short this stock since last earnings season.

And I think the way things are trading today, it could be a great time for you and I to double down.

My forecast is predicting that once this breaks down to that $270 level, mass selling will kick in quick.

I’d expect it to drop as low as $250 in the not so distant future!

You can pick the strike and duration you’d like to grab but a put on Microsoft (MSFT) appears to be the play of the day.

The Dollar Is Back, Baby!

Commodities are getting absolutely whacked right now.

And in particular Gold (GLD) is taking quite the nasty beating – falling through its bottom Bollinger Band.

Inflation is through the roof right now, and even though we may see the Fed taking further action in the coming weeks, it is here to stay for the time being.

But recent instability in the Eurozone, along with poor crypto performance, has gifted the US dollar a small revival on the world stage.

And that is hurting gold in a big way.

But as I always say, look for the trend on Gold (GLD), then look for the trade on the miners.

Where things are heating up

Before I can even begin to find a trade, I find it is helpful to take a macro look at the market as a whole, spotting all the strongest and weakest points.

And one of the best references is my very own ETF Performance Heat Map.

Here is today’s…

Consumer discretionary broke through a serious trap door of its own.

People simply aren’t buying unnecessary goods at the moment.

And that is for a wide variety of reasons.

Petrol costs are through the roof at the gas pump, food prices have skyrocketed, and housing is practically higher than ever.

That means less people have the budget this year to go on an exciting vacation.

That’s exactly why I just snagged a Carnival Corp (CCL) position with my Night Traders.

Every week, Monday – Thursday we’re trading the close together in our private club room hunting for the afternoon’s best opportunities.

We cut though the noise and trade the technicals, not media hype.

And there is no better time than 3:30 p.m. (ET) to take action.

My next big opportunity, like Carnival Corp (CCL), could drop any moment, so find out how to join today by clicking the link below.

Learn more and become a Night Trader.

I’ll be back for another edition of the Long and Short of It tomorrow morning.

See you then,

Chris Johnson
Quantitative Specialist, Penny Hawk


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