SU Is the Perfect Candidate for a Bear Market Rally
I don’t know about you, but I think it’s no longer a question that we’re in a bear market.The price action, volatility, and sentiment of traders right now all points to one. Heck, many popular stocks have fallen 80% from their peak. Just last week we had blue-chip names like Target and Walmart plunging double digits on earnings. John Deere reported great earnings and still fell 12% on Friday. It’s not pretty. But it also means that, sooner or later, we’ll be in for a bear market rally. That’s why I’ve been paying close attention to Mike Carr lately. He’s been a mentor to me for years now, and I know when he says something works… it works. And right now, he says the best way to spot a bear market rally is with his Greed Gauge. I was so intrigued, I added it to my unusual options scanner — and I couldn’t believe what I found… This trade looks like it was ripped right from the Greed Gauge playbook.
A $1.5M Bullish Bet as Markets Tanked
You probably don’t need me to tell you that the market tanked last Wednesday.The Dow Jones Industrial Average fell over 1,000 points and all major indexes were down several percent. It was ugly. It didn’t faze this trader though… They jumped in on May 18 with a $1.5 million bet that Suncor Energy (SU), an oil and gas company operating out of Canada’s Athabasca oil sands, will rally over the next two months. They grabbed the July 15, 2022, $41 call option. It was an out-of-the-money option, meaning the stock has to jump higher just to hit breakeven. One weak day in the market and this option can lose value quickly. That certainly qualifies as “unusual” activity. But when I pulled up the price chart, one thing immediately jumped out…
Mike’s Greed Gauge hit a new buy signal on May 16, right BEFORE this trader jumped in with calls.That means the Greed Gauge was ahead of the Big Money on this one… predicting a jump in SU before it rose as much as 7% last week.
This Trade Is Greed Gauge-Approved
Mike’s Greed Gauge took years to develop. To say it’s complex would be an understatement — he is a scientist, after all.But when it comes to applying it, the Greed Gauge couldn’t be simpler. You sell when it turns red, and buy when it turns green. See, the Greed Gauge pinpoints the exact moment that traders go from fearful to greedy… Getting you into a stock before other buyers rush in (green), and out before they sell again (red). This trader likely doesn’t know it, but their trade is Greed Gauge-approved. And looking at the chart, the stock has a few other things going for it. Shares just hit a new 52-week high in a volatile market, which is always great to see. And they barely fell as the market rolled over. There’s a lot of strength behind this stock, and a bear market rally will only push shares even higher. I’m still expecting one in the coming weeks. With the Greed Gauge, I’ll know exactly when it’s happening… And in just a few short days, you’ll be able to get your hands on it too. You see, Mike’s currently putting the finishing touches on a major new presentation he put together. In it, he’s revealing the full story of the Greed Gauge. How it works, why it’s working especially great right now, and how you can start using it to beat this bear market… This presentation is invite-only, and True Options Masters readers are getting the first opportunity to save their spot. You should see your invitation hit your inbox tomorrow. Until then, just be prepared. A bear market rally is coming, and Mike is about to show you the easiest way to profit.
Regards,Chad Shoop, CMTEditor, True Options Masters
Chart of the Day:Bitcoin — A New Dead Cat Bounce
By Mike Merson, Managing Editor, True Options Masters
After two weeks of teetering at the edge of a cliff, bitcoin looks set up to rally this week.But the big question is this… Have we hit the bottom of this spectacular fall from grace, or we should be short any rally as a dead cat bounce? Let’s consider the chart. Bitcoin has chopped around between $28k and just over $30k for the past 10 days. We can look at this as a mini Wyckoff distribution, which occurs after assets make big moves to the downside in a bear trend, and consolidate the new price information in a sideways channel. With bitcoin knocking on the door of $31k once again, and the moving averages starting to stack bullish, it sure is tempting to think of this channel as the bottom of the bear market. But we must remember, this bear market has only gone on for about 6 months. Previous true crypto bear markets have lasted much longer, often multiple years. With economic pressures mounting, it’s more likely that bitcoin and other cryptos will face the same headwinds as other risk markets like stocks. I think any break higher from bitcoin here will be sold aggressively. Bitcoin is still in a downtrend. I wouldn’t be surprised at all to see bitcoin trade closer to $20k in the next 6 months.
Mike Merson Managing Editor, True Options Masters
Investing has consumed my life since college. While double majoring in finance and economics at the University of North Carolina at Greensboro, I founded the university’s economics club, joined the finance club and participated in the Chartered Financial Analyst research competition to represent our school.