While several sectors have been in bear market territory for months, Monday’s 3.8% drop in the S&P 500 made it official.
Monday’s rash of selling was spurred on by a quickly unraveling situation in crypto. Plunging markets have spoiled the appetite for risky, volatile assets like tech stocks and crypto…
The sell-off is so deep at this point it’s threatening the livelihood of the companies and investors that went all in.
Crypto lender Celsius Network was forced to freeze withdrawals as margin calls forced clients to liquidate their assets.
And trading platform Coinbase Global Inc. (Nasdaq: COIN) is set to lay off 18% of its staff to free up capital through the downturn it’s calling a “crypto winter.”
It’s impossible to tell just how deep this plunge will take the market…
But that doesn’t mean there aren’t signs that traders can use to spot a market bottom…
How to Spot a Market Bottom
While traders can expect to see more selling of the riskiest assets through a bear market…
One trend we need to be on the lookout for is an extended pullback of the best-performing assets…
Which is why Monday’s move in the Energy Select Sector SPDR Fund (NYSEArca: XLE) caught my attention when it dropped around 5% from its previous closing price.
That brought the ETF’s losses to more than 10% over the past four sessions.
Energy stocks have been among the strongest performers so far for 2022…
So if you’re looking for the bottom of this market, this chart can help traders spot it.
Don’t get me wrong, I’m not saying the bottom is in, but continued selling pressure in the energy market is a healthy sign.
And when that bottom does arrive, the stocks I see as the best candidates for a bounce are in the companies that led the way down…
Check out the quick video and let me show you exactly what I’m looking for to spot the market bottom, and how to take advantage of it when it arrives.
Don’t forget you can follow me @LanceIppolito on Twitter, Instagram and our YouTube channel for more trading insights and tips. And as always, you can find me right here talking stocks and options trading — and printing money — on WealthPress.com!
P.S. With these intense market conditions, some mornings it’s hard to find the inspiration to get out of bed let alone trade…
But six months ago, WealthPress Senior Strategist Roger Scott chose to ignore all the noise, and he set out on a mission.
He wanted to bring his readers something brand-new… Roger had a vision for an entirely new way to trade…
One that doesn’t require any sort of technical indicators or fundamental analysis… And it has shocked him to his core.
