Why a Downturn is Sometimes a Good Thing

Jack Carter | August 6, 2024

Hey Traders,

Yesterday was one of those days that makes you go, “Whoa!”

The market took a nosedive, and suddenly everyone wants to know, “What’s going on, Jack?”

The Big Sell-Off

Monday saw a sell-off like I haven’t seen in a long time. It was like a wave crashing over the market, and folks I haven’t heard from in ages were calling me up, asking what to do.

Here’s the thing: when the Dow is down 1,000 points, that’s not the time to panic and sell!

Don’t be a panic seller!

If you sold Monday out of fear, you probably noticed the market bouncing back the next day, which means you’re likely buying back at a higher price.

It’s a common mistake, and it’s why I always emphasize having a strategy. When you panic, you’re at the market’s mercy.

I got a call from someone yesterday who was on the verge of a margin call and panicking about going broke.

Here’s a golden rule: only use money you can afford to lose in the market.

Imagine putting a lit lighter to a dollar bill and not worrying about it as you watch it burn — that’s the kind of money you should be trading with.

Everything else should be somewhere with less risk, like U.S. Treasury bills.

Why This Drop Was Healthy

Mainstream media was buzzing with comparisons to 1987, but let me tell you, this isn’t a crash.

The market going down was actually healthy and necessary. It sounds strange, but sometimes the market needs to dip before it can go back up stronger.

It’s about changing hands, resetting, and gearing up for the next move.

And here’s a reminder of something I always say to you: Even on a big down day like yesterday, there are bright spots.

Can you guess how many companies made new highs while the rest of the market was selling off?

Take a guess….

18! Yes, 18 companies hit new highs.

It’s a reminder that there’s always a bull market somewhere. You just have to know where to look.

Here’s an article I wrote a while back that shows you how you can do that.

Trade well,

Jack Carter

P.S. $8.8 billion is sitting on the sidelines and starting to pour into markets. But it’s not going evenly into the market… some stocks are attracting WAY more buy orders than others…

And this Thursday @ 12pm Eastern, I’ll be LIVE revealing the top 3 tickers getting this flood of cash! Click here to reserve your spot!

Trending Stocks of the Week — August 6, 2024

Jack Carter | August 6, 2024

$8.8 trillion is sitting on the sidelines and starting to pour into markets. This Thursday, I’ll reveal the top 3 tickers attracting the most buy orders. Save your spot right here!

Now for our top trending stocks of the week:

To help you discover the power of trends, every week, every week, I share with you a handful of the top trending stocks.

These stocks are picked by the custom-built TrendPoint software I designed to pick the strongest trending stocks in the market right now.

If you know anything about me, you know that every trade I get into starts with a trending stock.

Unless a stock is in a strong trend, I don’t want to hear about it. In my book, wishy washy stocks are the quickest way to losing money.

This Week’s Stocks

No question about it – the bullish trend has been broken. The SPY and the DIA got down near their 200 day moving averages. And the QQQ even spent a full down BELOW its 200 day moving average.

But guess what? As I always say: There are opportunities in every market and this market is no different.

In fact, these week, I’ve got 3 bullish stocks that hit new highs while everything else was crashing! Watch out!

  • MSI
  • CL (was on last week’s list)
  • VTR

And don’t forget about last week’s picks, which you can find here. Even the weakest one easily bounced up off its 20 day moving average — that’s strength!

This week’s stocks show a strong trend and could still be in play for the next few weeks.

What can you do with these stocks?

Well, there are a couple of things you could consider — after doing your own research, of course:

  1. You could just buy the stock. This is probably the simplest thing you could do. Then just wait for it to go up and sell when you hit a profit target you’re comfortable with. This is only for stocks we’re long on. For stocks we’re short on, you can short them.
  2. You could buy an option. You know I’m not a fan of speculative plays, but every once in a while it doesn’t hurt to throw a little cash at a speculative option. Of course, while options can move bigtime if the stock goes up… the downside of options is that you have a time limit on how quickly you need the stock to make that move. So think about your risk tolerance and consider buying calls or puts depending on the stock recommendations above.
  3. You could do an income play. If you’ve been following me for any length of time, you know that I’m a big fan of income plays, because they increase your odds of winning. We do this by SELLING options instead of buying them. If you haven’t tried your hand at income trading yet, I urge you to try this exercise for yourself.

    Without risking any money, it will really let you see the power of income trading and why it’s my favorite method.

    Whether you end up doing naked puts, covered calls or some kind of spread (like this bull put spread example), income plays like these are really my preferred method to use when I’ve found a great trending stock like the ones on this week’s list.

    Because even if the trend comes to an end, you don’t have to be exactly right. With a direction play like buying a call, you have to be exactly right. But an income play gives you a lot more “leeway”, where the stock can move against you and you still have room to breathe and win the trade.

That’s it for now.

Stay tuned, because I’ll be sending you a new list of TrendPoint Best Trending Stocks every week! (usually Mondays)

Trade well,

Jack Carter