Don here...
The S&P 500 just traded its entire monthly range in a single session. Top to bottom and back again. Blake Young flagged this as one of the largest single day ranges since November.
That kind of volatility demands a different approach.
Blake laid out a two-tier strategy in tonight's video. For longer holds, he's hunting low beta stocks with strong dividends that can weather the storm. For short plays, he's targeting weak financials and high betas to capture the downside.
Consumer confidence keeps sliding to multi-month lows. Manufacturing is falling. Yet durable goods orders are climbing. The data tells a mixed story, and Blake thinks the market will sort it out violently.
Here are the setups Blake walked through:
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APA (Energy): 0.75 beta, 4% dividend, potential 10% upside. Selling the $25 February put pays 3.3% while the stock trades in oversold territory.
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AT&T (Communications): 0.36 beta, 4% dividend, just broke above $24.99 resistance. Blake sees an 8-10% move higher.
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Procter & Gamble (Consumer Staples): 0.36 beta, bouncing off the pullback. Looking for a close above $149.70 to confirm the breakout.
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Snowflake (Bearish): Negative 166 fixed coverage charge, 1.5 beta. Already dropped 10% today while the S&P recovered. Blake targets $180, another 10% lower.
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Wayfair (Bearish): Negative fixed coverage charge, 3.3 beta. If it closes below recent support, Blake sees a move to $94.
The close today matters. Below 691 on SPY and Blake goes short. Above zero on the monkey bars and he waits for the 20% level.
Tomorrow brings PPI data and a Trump speech after the close. February's levels reset after that.
Click here to watch Blake break down each trade and his two-tier volatility strategy
Don Kaufman
Chief Market Strategist, TheoTRADE
P.S. The S&P just traded its entire January range in one session. That's not normal. That's a warning.
Blake's two-tier strategy helps navigate the chaos. But what if you could see these violent moves before they happen?
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