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Path of Least Resistance Still Lower

The market has been especially volatile since the release of the latest consumer price index (CPI) number last week.

The S&P 500 and Nasdaq 100 both hit new 52-week lows last Thursday immediately after the announcement, only to rally into the end of the day.

And once again, I heard many folks proclaiming that the bottom is in for this market.

However, it doesn’t take a rocket scientist to see that the path of least resistance is still to the downside…

Don’t Fight the Trend

In a market like this, you don’t want to make things harder than they have to be…

You see, the S&P 500 just made a new two-year low last Thursday following the release of the CPI report.

Sure, the market had a nice intraday reversal, but it has barely recovered any of its latest downside move.

Daily Chart of S&P 500 Index— Source: TradingView

You can also see in the chart below that the market continues to make lower highs and lower lows, which is a classic sign of a bear market…

Daily Chart of S&P 500 Index— Source: TradingView

The index is also below its down trending 21-day exponential moving average (EMA) as well as its down trending 50- and 200-day moving averages…

2015-2016 Daily Chart of SPDR S&P 500 ETF Trust (SPY)— Source: TradingView

So far, we just have not seen a serious rally in the market that I can get behind.

Stick to the Plan

I’m not going to try to time the low in the market. I understand that I’m not going to buy the low tick or sell the high tick.

Instead, I am sticking to my time-tested game plan…

I will simply look to buy stocks in an up trending market and short stocks in a down trending market.

I’ll happily sit out during the first 5%-10% of the next rally to make sure the market is in a confirmed up trend before I buy.

But right now, with what I’m seeing, I am looking for short opportunities on any signs of strength.

Insiders Lead the Way

Now, when the next bull market gets under way, one thing I’ll be looking for is heavy insider buying by corporate insiders who know the real worth of their companies.

Consider this… When corporate insiders like CEOs, CFOs, executives and board members put down their own hard-earned money to buy shares of their own companies, it’s a huge vote of confidence.

After all, these folks have a footing of knowledge about their companies that Main Street investors simply do not.

I will be talking more about how I use stocks and options to profit from corporate insider activity in my LIVE presentation TODAY at 10 a.m. ET.

It’s absolutely free to attend, so I really hope you’ll check it out.

I’ll cover my strategy for trading alongside corporate insiders and generating potentially massive gains with less risk.

Just click here to register for this special Insider Effect LIVE session now!

Embrace the surge,

Ross Givens
Editor, Stock Surge Daily

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