Where Will You Be When The Market Tanks?


Simpler Trading Team

Jan 15th 2021  .  2 min read

Less than a year ago the stock market was roaring.

Then a virus appeared out of nowhere, and overnight the market crashed.

History has shown that the market will tank again, even though we don’t know when.

But the elephant in the room (actually, our online chat rooms) begs the question, “Where will you be?” Well-positioned or collapsing in the chaos?

If the market makes a sharp correction, it can take down all those who are unprepared.

A big part of the Simpler Trading strategy is not getting so far over our skis that a sudden reversal tanks our trading plan or our accounts.

We don’t expect the market to continue a sharp rise to the upside. With more than 200+ years of combined trading experience, there is a collective insight of the past repeating (like February-March of 2020).

Key internal signals are indicating more intense possibilities of the market correcting. How much? When? For how long? Signals are about as clear as they’ve been in the past.

This is why Simpler’s traders are leaning bearish overall in the short term while maintaining bullish positions over the long term in specific tickers.

Traders work to make sure they’re not “long the world” while pursuing setups in which they are confident about the possibility of winning. Adjustments are constantly made as needed to maintain position sizing that matches capital and risk management.

If the market goes topsy-turvy again, Simpler’s traders know where they’ll be as they continue on with a mindset of, “What else you got?”

We’ll take what the market offers and act on that direction.

We Saw: Businesses incentifying people getting the vaccine – 

  • Major indexes down again, despite stimulus plans
  • Federal agencies, troops set to deploy vaccinations? 
  • Tax filing season delayed due to updates

We’re Watching: Internal signals hinting at correction –

  • Position size, position size, position size
  • Companies prioritizing employee health
  • Setups in: PINS, SPX, INTU, JPM, SNAP