Despite the fact that the major market averages opened higher this morning…

And despite the fact that General Motors (GM) just entered an agreement with the United Auto Workers union to end its strike…

We cannot forget that the S&P 500 and the Nasdaq are both down more than 10% from their 2023 highs.

This means that both are now in “correction” territory.

Will October be the third consecutive month in the red for the major market indexes?

If it is, it’ll be the first time the markets have fallen for three straight months since 2020.

So, as traders, we have to ask…

Will things turn around?

And if so… what’ll be the trigger?

Well, this week, we have three distinct catalysts…

• The Fed’s rhetoric: The Federal Reserve is set to make its next interest rate decision on Wednesday. This could be a large, market-moving event.
• Earnings: We have a full slate of earnings announcements this week, including Apple‘s (AAPL) on Thursday. Any of them could sway market sentiment.
• Jobs report: October’s jobs numbers are scheduled to be released this Friday. These figures always give a sense of the strength (or weakness) of the economy.

Clearly, any of these items could trigger a bounce…

But at the same time, they could also trigger another round of market selling pressure.

Therefore, as we enter the “correction” phase of the market, it’s smart to start looking at how to hedge in case the selling continues.

Today, I’ll offer you two of my best down-market hedge plays…

• Bear Hedge #1: iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX). This is a volatility hedge that is designed to move up as the S&P 500 moves down.
• Bear Hedge #2: Utility plays like American Water Works (AWK) and Dominion Energy (D). In times of market uncertainty, traders tend to move into the most stable, consistent companies on Earth – including utilities. These names represent the ultimate safe haven plays.

YOUR ACTION PLAN

If the market downside continues and the 10% correction turns into a full-blown avalanche of selling pressure, you have to be ready. Today’s two bear market hedge plays offer you shelter in case the storm gets worse.

And if you want to see how Karim and I use proven strategies to make consistent winning trades in any market, I recommend joining us in The War Room. Last week we had a 71% win rate, including a 23% gain on RTX (RTX) in one trading day.

Click here to see how we use a proven timing pattern to generate wins in any market.

MONDAY MARKET MINUTE

• Key Decisions From the Fed Upcoming. The Federal Reserve is set to make its next rate decision Wednesday. As of now, no rate hike is expected.
• The Economy and Job Growth. October’s jobs numbers are due on Friday. This event – as well as any surprises from the Fed – could trigger a bounce. We’ll remain light, balanced and ready for anything.
• DraftKings Price Target Lowered. TD Cowen analyst Stephen Glagola lowered the firm’s price target on DKNG from $37 to $35 and kept an “Outperform” rating on the shares. The firm said it expects conservative Q4 guidance due to the launch of ESPN Bet.
• Key Earnings Announcements This Week. Some notable companies reporting earnings this week include AAPL, AMD, CVNA and PYPL. I’ll be tracking these early on to see whether any of them could lead to Overnight Trade opportunities. Click here to learn more about my process for Overnight Trades.