To The Moon

On Monday, multiple stocks broke key support levels, and the Nasdaq dropped 4%. The VIX spiked 20% but remains below 30—a level historically linked to heightened market panic and potential bottom-fishing opportunities.

Will you hedge with inverse ETFs for more downside, or start buying in anticipation of a rebound?

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Click titles to read the full analysis:

1. @KingDw: Strategic Breakdown: Inverse ETFs vs. Bottom-Fishing

Key Points:

How I would Hedge and Prepare

1. Short-Term (Next 1–3 Days):

• Hedge with inverse ETFs (SQQQ/SPXU) **only if Nasdaq breaks 14,500**. Close positions on VIX >30 or Nasdaq RSI <25.

• Avoid aggressive bottom-fishing until VIX sustains above 30 or Fed signals dovish pivot.

2. Medium-Term (March–April):

• Accumulate quality tech/AI stocks at Nasdaq 14,200–14,500 (25% allocation).

• Rotate into defensives (XLU, XLV) if S&P 500 breaks 4,800.

3. Risk Management:

• Use stop-loss orders (e.g., 5% below entry).

• Keep 20–30% cash for lower entries (e.g., Nasdaq 13,500–14,000).

Bottom Line: This is a trader’s market—volatility demands discipline. Inverse ETFs offer tactical hedging, but the real opportunity lies in selectively buying oversold growth leaders after panic exhausts (VIX >30).

2. @nerdbull1669 : Appropriate Inverse ETF Hedging When VIX Crosses 20%

Key Points:

When the Volatility Index (VIX) exceeds 20%, it is indicating heightened market volatility and potential downside risk, inverse ETFs can serve as a tactical hedge.

In this article, I would like to share the approach I would use to effectively utilize inverse ETFs.

Current VIX Level - Above 27

Currently the $Cboe Volatility Index(VIX)$ is above 27 which signal market is experiencing high volatility and fear, there are panic selling as seen in last night trading, and there is a potential market bottoms.

So VIX > 25, that signals high volatility/fear (panic selling, potential market bottoms).

Select the Appropriate Inverse ETF

Match Exposure: Choose inverse ETFs aligned with your portfolio's risk exposure.

Here is what I would choose the ETFs for different purpose. If we looked at what is happening now during the selloff, I would think SH and SPDN might be appropriate.

Broad Market: $ProShares Short S&P500(SH)$ for S&P 500 exposure. As seen from yesterday trade, SH look to build a nice daily uptrend after crossing the 12-EMA, and it is crossing the 50-day period. RSI is also showing momentum increasing, yet not in the overbought region yet.

Leveraged Options: $Direxion Daily S&P 500 Bear 1x Shares(SPDN)$ for 3x daily inverse leverage. We are seeing similar behavior from SPDN, as RSI showing good momentum yet not overbought. The ETF is trading near the 50-day period. This make it a potential candidate to hedge when we saw VIX cross 20% and above 25%.

Sector-Specific: $Direxion Daily Financial Bear 3x Shares(FAZ)$ for financial sector hedging. This ETF might be suitable for investors who are looking for hedging against the weakness coming from financial sector, it is currently in a potential upside, we are seeing it cross the 26-EMA with RSI making a nice upside movement towards the overbought region.

But do watch the financial sector whether there is any recovery coming from any big banks.

Avoid Overcomplication: Focus on ETFs with high liquidity and low tracking error to minimize slippage.

This Is How I Would Do The Hedge

Currently, we saw VIX spikes to above 25% amid a market sell-off. I would allocate 15% of portfolio to SDS (2x inverse S&P 500) to hedge against further declines.

If the VIX fall below 20%, I will reduce the hedge by 5% for every 5-point drop in the VIX below 20%.

3. @Shernice軒嬣 2000:

Key Points:

Short $10 Billion: Have CTAs Overplayed Their Hand?"

Don’t get me wrong—I’m not popping champagne yet. Markets are twitchy, and CTAs could pivot if the data changes. I’m starting to feel cautiously optimistic. The selling wave feels like it’s hit a natural limit. If Goldman’s right and that $39 billion is the last big chunk, we could be looking at a breather soon. I’d keep my eyes peeled for any sudden price swings—those could spark another round—but for now, I’m thinking the storm might be breaking. Time will tell, but I’m hoping this is the cooldown we’ve been waiting for.

4. @KYHBKO:

Key Points:

⚠️Current market situation is ABSOLUTELY WILD:

1. S&P 500 has dropped in 11 out of the last 14 trading DAYS.

2. The index has tumbled 10% from its all-time high in less than 3 weeks, the FASTEST 3-week drop from the peak since the 2020 CRASH.

3. The daily RSI is at 20, the lowest since the first leg of the 2020 SELL-OFF.

4. The S&P 500 has now erased over $5 TRILLION in market cap.

5. Meanwhile, the Nasdaq 100 has plummeted 13% and officially entered a correction.

6. The Magnificent 7 stocks are in a BEAR MARKET and down over 20%.

7. The group has erased over $3.5 TRILLION in market value, more than the size of the entire German stock market.

8. Tech stocks are the most OVERSOLD since the 2022 bear market.

9. The Volatility index, VIX is up nearly 15 points and is trading at ~30, the highest since the August 2024 flash-crash.

What has happened to the AI hype? Time for a short-term bounce?

5. @Tiger V : Trump's Tariff War and Market Volatility: How to Navigate and Benefit

Key Points:

Trump’s Tariff War and Economic Concerns

The ongoing tariff war, particularly with the U.S.'s largest trade partner, Canada, has stirred concerns that it could push the U.S. economy into a recession. Here are the main concerns investors are facing:

Escalating Trade Tensions: Trump’s latest tariff threats, including the proposal to increase tariffs on Canadian steel and aluminum products by 50%, led to a significant drop in the markets, with the S&P 500 retreating by over 10% from its February highs.

Political Uncertainty and Volatility: Trump’s unpredictability with tariff policies is increasing market uncertainty. The sharp market drop due to the tariff rhetoric indicates how sensitive markets are to these developments.

Government’s Economic Strategy: Trump has openly acknowledged that the U.S. government is using tariffs to balance trade and cut spending, which could put pressure on businesses and the broader economy in the near term.

What to Consider When Investing Amid Market Volatility

With ongoing tariff wars and economic uncertainty, it is essential for investors to be strategic and take a long-term view of their portfolios:

Buying the Dip: The market’s decline, driven by fears of economic slowdown, presents an opportunity for those with a long-term perspective to “buy the dip.” Investors should keep an eye on sectors that could benefit from Trump’s economic policies, such as defense, infrastructure, and energy, all of which may receive increased attention as part of his “America First” strategy.

Hedging Risks with Defensive Stocks: Given the uncertainty surrounding trade relations and the potential for further market swings, defensive stocks (such as utilities, healthcare, and consumer staples) could offer some protection against the volatility of the broader market.

Bond Markets and Safe-Haven Assets: As stock prices fall, some investors may look to safer assets like bonds and gold, particularly if the Federal Reserve takes a more dovish stance in response to the slowing economy. Bonds could offer more stability, especially if there are expectations of rate cuts in the future.

Tech Stocks with Global Reach: Despite the risks to trade and the global economy, technology companies with a strong international footprint may weather the storm better than others. As tariffs disproportionately impact traditional manufacturing and industries, companies with scalable global operations may prove resilient.

Questions for you:

Will you hedge with inverse ETFs for more downside, or start buying in anticipation of a rebound?

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⏰Duration

• 19 March (24pm EDT)