I’m not buying that the pull back in markets is over so I’m taking out some insurance by going long TWM in my personal trading account.

Looking at the chart of low volatility safe stocks versus risk-on high beta stocks really puts today’s price action into perspective IMO:

Chart of low volatility safe stocks versus high beta stocks

Today’s up day doesn’t even register on the TSI which continues to fall.

You would think that with markets up so much today that we would have institutional traders buying. Not so according to the TICK. The TICK chart below, while not EOD which is what counts, shows the absence of broad-based institutional traders buying this market:

No institutional buying indicated by the TICK chart

Proshares UltraShort Russell 2000 Chart

The up move today in markets looks like an opportunity to short the market. The gambit is that markets will experience a dead-cat bounce. TWM looks like a good way to play this market.

The large players volume has been rising over the last couple of weeks and the Twiggs Money Flow confirms traders are shorting the market on rallies.

President Trump Sanctions China and Russia Over North Korea

President Trump made a big mistake today by putting sanctions against China and Russia over North Korea’s nuclear program. Trump’s actions don’t fix the problem, they just expand the conflict to include more countries who are pushed together in alliances against the U.S. You can read more about the new sanctions against China and Russia here.

What you don’t want to do is to end up being prey for larger predators that are shorting the market. I did a lesson on stock traders who are prey versus traders who are predators here that you should review.

If you have any insight or thoughts on trading this market leave your comment below.