Until stock markets sound the "all clear" signal and we can get back to our regularly scheduled bull market, we have to operate with a different set of rules in order to protect our capital -- both money and mind. Corrective or Bear Markets require a different set of tools. And it's not just knowing that the odds more favor short direction plays versus long direction plays, it's knowing that you have to manage open risk differently. You have to structure trades differently. And you have to operate in shorter time frames.

Down markets can be incredibly profitable for nimble traders. In fact, in my 20-year career, my most profitable years ever were 2000 and 2001 when we were on the backside of the Spring 2000 "dot com" bubble where NASDAQ dropped a dramatic 78%!! 

Honestly, I never thought a uranium play was something that would ever come across my desk, but a week ago JC published a piece highlighting the uranium space as displaying bullish turnaround characteristics -- which offers a nice portfolio diversification to many of us who are mostly positioning for the downside in equities right now.

As I've let this idea marinate in my head over the last week while watching declining volatility make long options more attractive, I've really warmed up to the risk/reward profile in this space and have identified a great way to position for exponential gains in the Global Uranium ETF $URA.

It's been quite a bounce in the markets since the end of October. And we expect to see many more such bounces in the days and weeks ahead as market participants battle to find equilibrium in a tape that has definitely been thrown off balance since early October's swoon. The thing is, our bet is that we'll see even more impressive bounces -- but from lower levels.

Our new regime thesis hasn't changed (yet), and as such, we view any bounces as great opportunities to establish new short positions in the weakest names in the market. And one of those weak names that we've been stalking is JP Morgan $JPM.

I'm in Chicago this week trying to sit down and chat with the smartest people I know in this city. I love the town, but man is it cold!

This is a special episode for me. James Bartelloni, CMT was one of my early mentors in the field of Technical Analysis. It's a treat to be able to have him join us on the podcast. What I like about Bart is that every time we chat, he gets me thinking about something new. He looks at the market in a different way than most market participants. His risk management techniques include sacred geometry, musical notes and lunar cycles, among others. It's always an interesting conversation with Bart, the editor of the blog BartsCharts.com. If this episode gets you thinking differently and gets you a bit out of your comfort zone, mission accomplished!

Last Monday we discussed our thesis for a bounce in Indian stocks and by Friday we were talking about how to manage those trades so that we could avoid letting winners turn into losers.

Now that we've gotten a decent bounce, many are asking what the next directional move in the market is going to be. In this post we'll outline why we think that Financials and Smallcaps are the areas to watch for clues.

Well, here we are folks... Election Day.

Depending on who you talk to, today could be "the most important mid-term election of our lifetime." (aren't they all?)

All the hype. All the buildup. All the angst.

Regardless of the outcome, it's possible U.S. stocks can experience outsized and emotional moves. We all remember November 2016 when final voting tallies were coming in and overnight futures were signaling the end of times, all trading limit down. Every market participant was scared and likely had a sleepless night. And what happened when they rang the opening bell?

There are assets out there that have a lower or no correlation with the rest of the U.S. Stock Market. These investments are really helpful, but even more so when we're looking for stocks to buy in an environment where we think most stocks keep falling in price. One of these less correlated areas is the Uranium space.

Investors in Uranium stocks over the past 7 years have been some of the worst stock market investors in the world during that period. Think about this, Uranium investors have performed even worse since 2011 than gold and silver investors! That is saying a lot. We've already been buying precious metals stocks the past couple of months so it seems like rotation into the worst of the worst areas is happening in unison.

First of all, here is the Uranium Futures chart breaking out from the downtrend it has been in since the Fukushima nuclear disaster in 2011 that marked the top in the space:

Click On Charts To Zoom In

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05/01/2019 UPDATE:

As a result of the labor intensive process needed to maintain the Chartbook Notes and their lack of use by the majority of members, we have decided to discontinue this feature. We will be adding new tools and functionality to replace it by the end of the quarter. In the meantime if any of the charts in the Chartbook are unclear and you need further clarification, please feel free to contact us and we'll get back to you within 24 hours. Thank you in advance for your patience as we make these improvements to the site.

In June we made some major changes to the format of our Chartbooks based on your feedback and today we're happy to introduce some new changes that we think are going to be very helpful for us as we maintain them and for you all as you use them in your analysis.

One of the beauties of options trading is even when we don't have the highest conviction in a trade, we can still participate by lowering or shifting our risks.  I come from the school that says spread your bets out across the market -- small -- because the constant pursuit of edges will yield results over the long run as long as no bad individual trades are too big to take us out.

In our most recent monthly All Star Options Conference call, we highlighted a desire to play for a bounce in bonds. In the days since, the market gods are either taunting us, or smiling on us -- offering better entry levels.

It's easy to say. You hear it all the time. That word, "Patience".

How many of us actual put this into practice? It isn't easy. We're an instant gratification society. How happy does it make you feel when someone 'likes' a picture of your kid, or the beach selfie you took over the weekend. Traders get similar dopamine kicks when we enter a trade, and that soothing bling sound on the computer goes off, almost as a reward for entering the trade. You notice how those post trade sounds are never something ugly and nasty like the sound of a car accident or something horrible. It probably should be, because that trade you just put on is most likely going to lose you money. That's not blingy like the default audio settings on your trading platform are suggesting.

The point is that in both markets and in life, I think we need to recognize what is just making us happy today vs what will make us happy in the future. Temporal Discounting is what the behavioral finance people call it. Who are you trying to make happy - the JC now or the future JC? I think it's important to approach both life and the markets by proposing this question.

From the desk of Tom Bruni @BruniCharting

The TSX Composite is down roughly 6.75% year-to-date, with stocks getting hit hard since their July 13th, 2018 high. Only one sector is positive over that time period, but I think its recent action gives us a really good perspective on the type of market environment we're in.