If you feel like the market could be running out of steam, you’re not alone…

Over the past few weeks, the markets have quickly turned towards a more bearish sentiment – especially as we head into May – which has historically been one of the worst market months of the year.

It sure feels like the “Sell in May and Go Away” mentality starting early this year.

Case in point…

Last week, the S&P 500 and the Nasdaq lost -3.05% and -5.52%, respectively.

The Nasdaq lost -2% on Friday alone, led down by Nvidia’s -10% drop.

Although the Dow ended last week flat, it sure feels like the time to start taking a more defensive approach to the markets.

How can you accomplish that?

From a trading perspective, I use the following three “ultra-short” assets as hedging tools…

• ProShares UltraShort S&P500 (SDS)
• ProShares UltraShort Dow30 (DXD)
• ProShares UltraShort QQQ (QID)

These three assets move at a rate of 2x the Inverse of their benchmark index.

So…

If the S&P 500 loses -2% on any given day…

The SDS is designed to gain +4% on that same exact day.

See how that works?

The asset moves at a rate of 2x the inverse – which offers you a very powerful way to protect against further market declines.

YOUR ACTION PLAN

Using ultra-short plays as hedges could offer you an element of safety during times of market uncertainty and bearish – which could be starting now. I just took a winner on SDS last week – and I’m looking for to reload a new round of exposure as we speak. What exactly is the next trade? Tune into Catalyst Cashouts LIVE TOMORROW and you can see the trade unfold – in real time.

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MONDAY MARKET MINUTE

• Notable Sentiment Shift: The markets are quickly turning towards a more bearish sentiment – especially as we head into May – which has historically been one of the worst market months of the year. Is the “Sell in May and Go Away” mentality starting early this year? Sure seems that way. Tracking.
• Metals Rally Onward: The price of gold is up +15% year to date – and has gained +22% since the Fed began rising interest rates – which is very unconventional relationship. If gold can shrug that off… then what’s stopping the rally to continue? I may get us more metals exposure this week.
• Pullbacks I’m looking at: Whirlpool (WHR) and Steel Dynamics (STLD) are two strong businesses that have now become cheap. Karim would be so proud of me!
• GE Vernova gets a boost: General Eclectic’s spinoff has been received very positively from Wall Street – noted by Raymond James’ outperform upgrade and $160 price target.