As you guys know, we've been rooting for a stock market crash for most of October. When we're shorting stocks, we want the market to drop as fast as possible so we can make a profit. You may not like the repercussions of a severe market correction, but since there is nothing we can do to prevent it, all we can do is try and profit from it. Innocent people's portfolios will get slashed under those circumstances, companies will shut down and people will likely lose their jobs. An economic recession may even follow. We have no idea and no say in the matter anyway. So we've had two options in October: Close our eyes and ignore it? Or prepare and profit? We've chosen the latter.

In case you're wondering, we're still rooting for a complete collapse in U.S. Stocks. The only thing that would make us more neutral is the Russell2000 Index Fund $IWM holding above 151. Under those circumstances and more neutral approach towards equities is best. In the meantime, we'll keep pressing shorts and hoping for the worst.

Today, I want to bring up two charts that I believe are pointing to further...

The last two months have not been kind to India's stock market, which is why we've been approaching it from a more neutral perspective for most of that time. Although big selloffs are never fun, the progression of this trend from its start to now has been pretty orderly.

We want to use this post to lay out that progression for educational purposes, as well as update our views on the market now.

For this entire month we've been discussing why a continued neutral approach toward equities was best and what we needed to see to get more aggressive on either the long or short side. The bull case has been building all month and after weeks of patiently waiting the market has finally given us the last piece we needed to get involved, a well-defined risk level.

Welcome to the new market regime, young lads. Many of us, and many more that are way older than me, have seen plenty of bear markets. At our shop, we rely heavily on global markets to give us information about stocks as an asset class, so we're accustomed to seeing bear markets all the time. It's nothing new to us. But I understand that many of you are new to this whole up AND down thing. It's normal, I promise.

Today I want to stress an important point that I think gets forgotten: The biggest stock market rallies come in bear markets! You don't get 6% rallies in the Dow when we're in healthy uptrends! You need serious volatility to spark something like that, and it only happens when risk is extremely elevated. I'm sure you've noticed that we’re getting much bigger down days AND up days in the market lately. This is not characteristic of the type of environment where stocks are going up. It’s the type of behavior we see, historically, when stocks are going down. This is one of many reasons why we’ve wanted to sell ...

The market is a beautiful thing. We have uptrends and we have downtrends. We weigh the evidence regularly to determine which one of these we’re in, or if it's a sideways trend. Our approach to the market has to depend on the market environment we have. In other words, we have to play the cards we're dealt, not the cards we might want. So we first determine how we want to approach the market, and then we decide which vehicles would be the best way to express that thesis.

Here are a list short ideas that I think present favorable risk vs reward opportunities:

From the desk of Tom Bruni @BruniCharting

Over the weekend I ran the performance metrics of the Russell 3000's Sectors and Industries to get some perspective on where the leadership is since the S&P 500's high on October 3rd and year-to-date. In this post I just want to share this table and talk about some of the themes I see.

From the desk of Tom Bruni @BruniCharting

On the blog we've been discussing why a more neutral approach to the market is best, as well as what we're looking for to mark a tradeable bottom. Last week we saw an expansion of new lows and stocks hitting oversold conditions in the Russell 3000, however, we are beginning to see some improvements in its daily momentum readings.

It has been a wild couple of weeks for participants in US equities. Up is down. Black is White. Dogs sleeping with cats. This is what happens when market regimes go through change. The ripples can be seismic.

The one thing we can count on as options traders is that implied volatility -- more specifically, the fear premium being priced into options right now -- will eventually subside. If there is anything that can be counted on to be "mean-reverting" in this crazy world of ours -- it is most definitely implied volatility. This means we definitely want to be on the hunt for opportunities to put elevated options premiums to work for us. We want to be net sellers of options here.

With 53 days until December options expiration, now is the ideal time to start scanning the most liquid ETF options in our universe for income trades.

The big question coming into this wasn't whether or not we wanted to be sellers of stocks, but how low could stocks go? The point I tried to make was that they could go a lot lower than any of us think. I've been around too long and have seen too much to be surprised by anything anymore. So if the risk is skewed to the downside, in theory there is unlimited risk. Whether there is or there isn't, is not the point. The fact alone that we're even talking about it has been reason enough to not be long this market.

When looking below trying to figure out how low we can go, I can draw all sorts of Fibonacci retracement levels and horizontal lines of all colors, but the truth is that the market doesn't care about JC's lines. Forced selling sparked by margin calls and hedge funds blowing up causes prices to blow through any "levels" all the time. Remember, when we identify specific prices, they are just levels of interest, not necessarily support levels. We won't know if they were actually support until well after the fact.

With that scary disclaimer in mind, I did my best to identify the most important levels of interest. This is where we want to be looking...

Disney is another stock that has been on our watch list for a short trade, but has stubbornly held on... until today. We had been waiting for $DIS to close below $113 and on Wednesday our criteria was finally met.

Could the broader markets be due for an oversold bounce here? Sure. But we think Disney's price action (better late than never) was an ugly omen for the start of a pretty bearish movie coming in this name over the next several weeks.

This past weekend I was down in San Diego for the annual Trade Ideas Summit. I gave a presentation earlier in the day, which you can watch here, and then sat on panel later in the afternoon with some really smart guys. So I thought it would add value to share this conversation with everyone.

My good friend Sean McLaughlin, who is also the Chief Options Strategist at Allstarcharts.com moderated the panel, which included Brian Shannon and Dr. Brett Steenbarger. This conversation revolves a lot around process. Dr. Brett gave us a ton of insight as to what we can do psychologically to help us...

When the stock market is not going up, the blame game gets played. It's a combination of shareholders losing money and media types needing something to say. It's always someone or something's fault and rarely described as a normal occurrence. The truth, however, is that yes, stocks falling in price is part of the regular cycles that we've always seen. In fact, stock markets that don't have periods of falling prices are incredibly abnormal. 2017 for U.S. Stocks was the exception that proves the rule.

The reason I mention this is because we have not been in an environment where we want to be selling strength since early 2016. Many of you have been following my work for many years and remember my gloom & doom days of 2015 and even as far back as 2008. You guys already know that I'll be bullish stocks when appropriate and bearish when necessary as well.

It's...

From the desk of Tom Bruni @BruniCharting

When the weight of the evidence is pointing in one direction as it has been for most of the last two years, it makes sense to be aggressive and take advantage of the clear trends while they're intact. However, when conditions change and the evidence becomes more mixed, a more neutral approach is appropriate. But what does that look like from a practical sense?

When the weight of the evidence is pointing in one direction as it has been from early 2016 through mid-2018, it makes sense to be aggressive and take advantage of the clear trends while they're intact. However, when conditions change and the evidence becomes mixed, a more neutral approach is appropriate. So what does that look like from a practical sense?

From the desk of Tom Bruni @BruniCharting

The new 52-week high list has been pretty scarce as of late, but Verizon's earnings announcement propelled its stock above an important level of resistance to 17-year highs, signaling further upside may be be ahead.

We don't do a lot of "earnings" plays here at All Star Options. We don't scare away from entering smart trades with defined risk ahead of earnings reports, but only if we feel there's a larger play in the cards.

However, when all the stars align, we'll consider specific opportunities.

We've got one all lined up with Avis, $CAR.

The thing about the market is that there is no holy grail. No matter how hard you try, you're not going to find it. The holy grail does not exist. We have to weigh the evidence knowing full well that we're working with incomplete information. The idea is to accumulate all of the data and make a conclusion based on all of it, not just some of it.

Today, I want to go over a few of the divergences that have put the bulls in a precarious situation. There is a large crowd of permabull "passive" investors that are taught just to buy stocks and hope for the best. They are shown all of these sexy equity curves and told again and again how much they would have made had they invested in the S&P500 in 1950 or 1982 or whatever cherry-picked date is forced upon them.

It doesn't make these people good or bad. It's just what it is. I think it's important for market participants to understand the way things work. Based on the tiny tiny sample size of a 100 years or so, sure a lot of these theories could make some sense. We've had less than a handful of secular bear markets during...

This weekend we updated our chartbooks for Premium Members of Allstarcharts India, so I wanted to do a quick post outlining the changes to our universe of stocks since the end of the first quarter.

This weekend I was down in beautiful San Diego for the 3rd annual Trade Ideas Conference. For me, it's not just about the presentation that I give or the panel that I sit on, but the people that I get to meet or see again. That's the great part about our community: everyone's ability to share and learn and recognize that we're all in this together. As we approach the market with our own individual goals and objectives in mind, along the way we pick things up from others that help us adjust and fine tune our strategies regularly over time. My friends at Trade Ideas put on a good show, but it was the engaged audience and interactions with my fellow speakers that really made the weekend great.

Here is the video of my presentation. Shoot us an email to info@allstarcharts.com if you're interested in receiving the slides:

So far, this new corrective phase in U.S. stocks is playing out according to script: Deep down moves, interrupted by gravity-defying bounces that suddenly get saddled with lead weights which drag stocks back down with the fishes. Sorry for the horrible Godfather-inspired mixed metaphor.

In this type of environment, we want to be patient with our risk-defined positions when they go against us, yet aggressive when they go our way. This one simple mindshift will be what separates the winners in a bear market from the pretenders.

We laid out our first list of stocks we want to be short in a correction back on October 12. So far, this list is treating us well. The next name that we're ready to tackle is Cisco $CSCO.

Frank Cappelleri is one of my favorite guys to listen to. He brings a unique perspective because of a lot of his experience on Wall Street. Early in his career he spent time working at Smith Barney with legends Alan Shaw and Louise Yamada. He then experienced his first bear market after March 2000 working with former Lehman trader John Schlitz. Frank has been at Instinet, which is owned by Nomura, for a long time and is constantly in touch with some of the smartest guys in the business. I think he's as good a technician as anyone and in this episode he shows us just that. We discuss the market implications of a rising US Dollar and why he no longer has a target above 3050 for the S&P500. I was really looking forward to this conversation and we're lucky we get to pick his brain for a bit. I hope you enjoy this one!

A US stock market crash is a real possibility. 

We have not been in an environment where this was on the table for a long time. For those of you who know me, I think I've proven that I'm not one of these end of the world guys. We can probably all agree that I call it like I see it and have no directional bias. I walk around daily proud to not care whether the market doubles or gets cut in half. We just want to be on the right side of the trend.

The risk for most of the month has been skewed in favor of the bears. As breadth has gotten worse and momentum has confirmed downside pressure, I believe there is unlimited risk in the market right now. Nothing is out of the question.

In my opinion, we are in a stock market environment where a crash is entirely possible. Now, just because it is possible doesn’t mean it will come. I think of it like the city of Miami, where I grew up, during hurricane season. Just because it’s the season doesn’t guarantee that a storm will come, but it is absolutely...