The selloff has started and now it is all about grabbing gains on the way down. There are a couple patterns that play out very often when the market declines. First, if you want to confirm that the sell off is real, just look at the VIX. This tracks expected volatility (basically how much traders think the market will move in the next couple months). It skyrocketed yesterday to almost double what it was just a couple weeks ago. If you look at the history of the VIX, it almost never goes up that quick unless the market is going to make a big move down. The second thing to consider is that markets tend to move down faster than they go up. As soon as a reversal takes hold, traders are trying to get out. While the entire market is dropping, not all stocks will fall at the same speed. Trying to pick the one stock that is going to move down quick enough to make the options trades pay out handsomely is not easy. This climate we are in sets up a perfect environment for using index ETFs to grab profit as things correct. Lee Gettess sent out a message about his O Force system earlier that uses just four of the index ETFs to consistently pull in huge wins. It makes it simple and easy to trade this exact kind of market. If you missed it you can still get it here.
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