Bearish Start to September: Hedging 2.0 Review

Sep 8, 20244 min read

9/8/2024

September is historically a tough month for the markets. Whether or not seasonality is real, the first week of September certainly feels like it is. After that V-shaped recovery in August, I’ve been raising cash and hedging with collars on all my positions. If I’m called away at all-time highs, so be it—there’s easy money in treasuries like SGOV right now. I’ve been writing about this here and posting my thoughts in discord for a while now, so I guess it’s no secret!

Yes, rate cuts are on the horizon, but that doesn’t mean we should rush in. I’m being selective, and you should be too. When the market’s near its high, why chase risk for a 7% return when treasuries are offering a solid 5% pretty much risk free? The real opportunities come when we can target 15-30% returns—and we’re getting closer to that risk to reward as the market keeps pulling back. I’ve talked about my plans for a soft vs hard landing.

While volatility will ramp up as we head into the election season, don’t expect the market to go straight down. Even in bear markets, aggressive bull moves happen. My hedges have been paying off during this pullback, and my dividends remain strong.

Want the inside scoop?

For months, I’ve been laying out the groundwork for those in the Mr. Money Maxwell Inner Circle.

Specific dividend ideas, what I’m doing for a soft landing versus a recession.

This week I’m sharing my exact hedging strategy from this week for members. I want you to build a system where you can make money as the market pulls back just like I did this week.

My step-by-step analysis helps you build a strategy simple enough for anyone to follow.

As we head into fall, this public blog, Maxwell’s Market Mindset, will get shorter and more concise.

The best content—like my exact hedging strategies, ebooks, trade setups, and personal market insights—will only be available to Inner Circle members. At $99 a year (less than $2 a week), this is your chance to gain access to premium content before prices rise.

I’m not pushing you to join, just giving you the opportunity to lock in this value while it’s available. With volatility high and new opportunities forming, now’s the time to get ahead of the market with a simple, effective plan. The Inner Circle will get my full breakdowns to help navigate these tricky waters and make money regardless of market direction.

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Weekly Charts:

SPY- Is spy a double top of are we going to s curve higher? I think the market will remain volatile as we head into November’s election. The market is trying to figure out which candidate’s policies we’ll have for the next 4 years. What normally happens is once we find out, things will chill out. Perhaps I’m too bullish all the time, but I think if we can keep dipping it will be a good buying opportunity heading into the end of the year.

QQQ- Tech looks really weak. This is not a surprise to the inner circle. I sold and collared all of my tech into the strength last month. So far that was a good call.

RSP is the equal weighted SPY, meaning tech isn’t as strong. Although we have an evening star reversal up there (the red box). It looks stronger than SPY and QQQ. This means the market still has some strength, although this week was weak. This is a good sign of a healthy market rotation.

Do you know how to trade an evening star reversal? Did you see the blog about my favorite chart patterns? I’m not shorting RSP, I would look to buy on a pull back. Maybe off the moving averages?

Have you downloaded my free guide to make your chart look like my chart? Download it here. Moving averages are important to my trading.

VIX is spiking a bit, makes sense as we sell off, also the uncertainty heading into November maybe we can see VOL staying bid so we can sell some premium? Remember if you sell puts, you are agreeing to buy lower, if the stock doesn’t drop below the strike you just keep the premium. We want to see VIX stay elevated. Just not in the 60’s in a single day pretty please.

TLT- I don’t know how to say it any other way. You should be in TLT, this is going to go up as rates come down. I’ve been for a year, I don’t think it’s too late, consider buying the dip or just buy it… (disclaimer: this is not trading advice).

GLD had indecision this week. Gold has been a flight to safety and I don’t think that will change. I’m bullish, but maybe we have a little sideways movement for a bit? Iron condor, Strangle, or a bullish strategy makes sense to me.