The CBOE Put\/Call ratio<\/a> popped as high as 1.37 this week. Anything above 1.20 shows an extreme level of pessimism.<\/p>\n By Thursday morning, when the S&P 500 dropped another 20 points, it seemed as though just about everyone had turned bearish.<\/p>\n But, if you paid close attention, you would have noticed several indicators had reached levels that have often led to strong stock market bounces.<\/p>\n For example, the Volatility Index (VIX)<\/a> closed above its upper Bollinger Band<\/a> on Tuesday and Wednesday. So, the VIX was set up to generate a stock market “buy” signal when it closed back inside the bands (which it did on Thursday). The previous VIX buy signal<\/a> occurred in early August – just before the S&P gained about 100 points in a week.<\/p>\n The McClellan Oscillators<\/a> for the New York Stock Exchange and the NASDAQ (NYMO and NAMO) closed below their lower Bollinger Bands on Wednesday. This extremely oversold condition usually occurs at the end of a sharp decline, not at the beginning of one. And, it often leads to a sharp stock market bounce.<\/p>\n So, on Wednesday afternoon, I told my Delta Direct<\/em> subscribers that – as hard as it might be to do – it was time to bet on a stock market bounce. And I recommended buying call options on SPY – the exchange-traded fund that tracks the S&P 500 [Delta Direct<\/em> subscribers can catch up here<\/a> and here<\/a>].<\/p>\n We weren’t trying to buy at the absolute bottom. And we weren’t looking to hold the position for longer than a few days in anticipation of some intermediate-term rally phase. All we were looking to do was to buy into a position when it appeared the proverbial “rubber band” had been stretched to the limit. Then we would sell when the rubber band snapped back.<\/p>\n We recorded a 39% gain on the trade in two days.<\/p>\n And… That’s how you trade a bear market. <\/p>\n Successfully trading a bear market is not about maximizing gains. It’s about making quick, profitable hits.<\/p>\n You wait for severely oversold conditions before you buy anything. Then you sell when the rubber band snaps back and conditions become less oversold.<\/p>\n And, you wait for severely overbought conditions before selling stocks short. Then you cover those trades when the market turns neutral.<\/p>\n If we are indeed entering a bear market, and I think we are, then we’re going to see a lot more weeks like the last one. So, like I said… last week was a pretty good practice session.<\/p>\n Best regards and good trading,<\/p>\n Jeff Clark<\/p>\n P.S. <\/strong>I see much more than just a bear market ahead… I see the market crashing… this month<\/em>.<\/p>\n Investors who practice the “buy-and-hold” strategy could lose everything. And while that may sound scary, for traders, it could be a chance to make a small fortune. Especially those who use the strategy I have developed over 36 years of trading…<\/a><\/p>\n That’s why I wanted to get this presentation<\/a> out to you folks. Not only will I detail how you can make money while everyone else is losing their shirts, but I’ll tell you the exact date I think the market might crash.<\/p>\n![](\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\")
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