You can see i’m out here in turkey for the weekend, we’ll be back in dubai. Thereafter. The nasdaq just flashed a bearish signal, along with some of the other indices, and we need to talk about this right now, not to fear monger, but just so that we make sure that we are prepared and have our portfolios protected as much as possible. So we’ll go over some things that we can do in order to protect our portfolios. I did a whole video about this. I will link it here. However, i will reiterate some of those things in this video. The fed’s continuous easing of monetary policy, trillions of dollars being injected into the markets a sharper than expected economic slowdown post pandemic, as well as rising coronavirus numbers only are leading to uncertainty in the short term. Not to mention the summer months are usually the slowest in the markets anyway. So in this video we’ll go over the charts. What you could do to protect yourself, we’ll go over an update of some of the plays that we have as well as some of the plays that i’m looking to make considering the market conditions as they stand. We’Ve been hedging for a while we’re up 70 on our spy puts we’re up 15 on our nasdaq bear put spread, and we have also taken some bearish positions on netflix as well as some other stocks. We will talk about in the video if you get anything out of this video leave it a big fat thumbs up just like this leave it in the comment section below.
Let me know how you are hedging your portfolio, and i just want to be clear that, even if you are bearish in the short term i’m of the belief that you should never really stay out of the market as in completely divested out of the market. Now, you’re going to alter your distribution depending on the market conditions but i’m, not of the belief that you should stay completely divested out of the market. Nobody can really predict exactly when a market crash is going to happen, but you can prepare yourself for some volatility. Some some expected volatility in the short term and protect yourself by getting some profits back so that you’re not just sitting on your hands, watching your portfolio dwindle anyway. Let’S get right into it. All right so let’s take a look at the nasdaq’s chart first and then we’ll get into an update of the plays, as well as some trades that i’m looking to make considering the current market conditions. Looking at the nasdaq on the one day chart, we just flashed a bearish macd with a red histogram for the first time since april. Now, if you have been trading throughout this year, you’ll know that in february and april we experienced the two biggest drops on the nasdaq, the first one being actually an official correction, because we dropped more than 10 percent on the nasdaq in february after flashing that sign It’S also important to note that these things could take weeks to play out if they play out at all the second time we flashed a bearish macd was in april, where we experienced an almost correction as well forming this double bottom on the nasdaq which then pushed Through resistance to all time highs – and we are now seeing that bearish macd again, the rsi is dropping like a rock.
Now, if we look at before april, we have seen the bearish macd crossovers fake out on us, as we saw throughout most of december, where the macd really looked like it was going to turn bearish and just remain sideways for a while, while the price of the Nasdaq pushed on higher and higher all that is to say that, just because the nasdaq flashed bearish does not mean that we will see another correction. However, i do think that we will see some chopping is throughout the summer months, not only because the summer months are usually the choppy months anyway, but considering the market conditions that i talked about at the outset of the video now i’ve also talked about this. With respect to the s p and the dow jones industrial average, these two actually have not seen a correction. Yet since the pandemic crash of march 2020, the nasdaq was the only index that officially saw a correction, meaning 10 percent or more of a drop. However, we do see that bearish macd signal showing on the nasdaq as well as the dow jones as well. So what have we done to hedge against this expected volatility in the markets? Well, last week, on july 15th, we bought the 430 spy puts expiring july 23rd. We are currently up 70 on those puts now. Why did i buy those puts well, i wanted to buy shorter term, puts to keep our costs low, but not so short term that we get eaten up by theta, otherwise known as time decay.
Also, we wanted to pick a strike price that had a crap ton of volume because of liquidity, the more liquidity we see, the less the bid ask spread, is as well, and it tells us where the market is looking for in terms of support or resistance. For that asset, in this case, we’re talking about the spy which tracks the s p 500. That is why we picked the 430 puts here and we are up 70 on those we’ll likely close those out on monday. On friday, we also open the 361 362 put spread on the nasdaq because of the bearish signal that i just showed you, and we are up 15 on that trade as well, and before that we opened up a slightly bearish trade on netflix, where we sold a Bearish diagonal call spread leading into earnings. We also had a bearish trade on morgan stanley, which we netted a hundred and forty percent on that that was an earnings play and the reason that we opened. That is because of how the other banks reacted to earnings, as well as the fact that rates continue to drop, which is bad for banks all right. So, besides those what other trades and plays, am i looking to do considering the current market conditions? Well, as i said at the outset of the video i’m, not of the belief that one should stay fully divested from the market, i’m always invested in the market one way or another again, the distribution will differ depending on the market conditions that i see, however, i’m.
Never completely divested from the market, so i do have most of my long term plays we’re talking about nvidia amazon, google, home depot, mcdonald’s et cetera things that i bought last year. I will likely not sell those because of the low cost basis, as well as the additional tax burden that i would inherit by selling those in the short term. You want to keep those long term holdings as long as possible, especially if you bought them at a low price, and you still have a high conviction in the company for the long term. Now, as as i discussed in that hedging video one thing you could do is sell covered calls, you could sell poor men’s covered calls. You can obviously trim and sell your position if you’re a short term trader and or you could do what i did with netflix. For instance, where we we opened up a bearish diagonal on nike, for instance, i’m looking to buy a bearish put spread on nike. It looks like we are hitting a top here. The rsi has been oversold really for almost a month since june 23rd, we are seeing the mfi which tracks the money flow or the volume flow. We are seeing an outwardly direction on the mfi, which is bearish. We are seeing the macd almost turn bearish as well after being the highest that it has been in a very long time. We’Re talking about years and nike could likely retest either the 21 ema at around 153.
It could even go back to this former resistance line and test it as support. This is called a support. Resistance flip. This is around the 146 range, so i i’m comfortable opening a bear put spread on nike. I do own in full disclosure. A lot of nike shares that i bought throughout the pandemic. Another stock that i’m looking at it’s, not all bearish doom and gloom you’ve heard me talk about session time and time again. We sold our position after this double top here and i re entered sesson at the 50 day moving average session and the fda reiterated the august 18th deadline for vicenium. That is the deadline for approval that the fda has given. Obviously, the drug can be approved well before august 18th. We have exactly a month from the time of this recording. We could even fall to the 340 range, maybe even the 317 range. However, i do want to get in early before fda approval. I do have strong conviction that vicinium will actually be approved by the fda, because a lesser drug, a lesser effective drug was actually approved by the fda and vicinium’s results are continue to be promising, especially compared to that drug now in terms of trades. One other thing i need to point out is pay attention to the index funds. What do i mean by this? Well, i sent out a note last may, when we crashed right when there was a crash, i sent out a note in the discord saying that you want to take advantage of the indexes, as well as the blue chips that are on sale.
So i was saying tesla palantir neo amd qqq, which is the etf that tracks the nasdaq ba cmg amazon shop sony. All of these are up some of them hit all time highs, since that note on may 12th coin being the exception here. My point is when these index etfs, such as the spy, the qqq dia, which tracks the dow jones when these are at major moving averages, you have to buy them for the long term if you are investing in the market. If you look at a weekly or monthly chart of the s, p, 500 or the nasdaq, if you look at these etfs time and time again, it shows that you have to buy at the major moving averages to give yourself a chance for the long term. Remember what i said in the last video every market crash was a previous high at one point right, so don’t only pay attention to the market and how it’s dropping make sure that you are looking at whether these index etfs are at major moving averages such as The 50 100 200 even the 300, even though we haven’t hit that in a long time since the low of the pandemic, but you owe it to yourself to buy at these levels. If you are a long term investor too many times folks want to hit home runs, and so they load their portfolios with penny stocks and risky stocks. That is not the way.
There is certainly room in your portfolio for that, but that should not be the cornerstone of your portfolio. Obviously it’s your money do without wilt anyway, traders. That is it for this video. If you got anything out of this video leave it a big fat thumbs up. Just like this leave it in the comment section below, let me know how you are hedging your portfolio. Also, if you want access to all of our trades, including the ones that i went over in the video link, is in the description below. Follow me on social media, instagram, instagram stories, youtube stories, etc. If you want to see stories from my travels, i love posting those. I don’t typically make videos about traveling on the main finance channel, because it just doesn’t make sense, and you guys would hate me for it subscribe to the channel hit that notification bell stay safe out.