Recent meeting notes from The Federal Open Market Committee (FOMC) show that they’ve decided to take a “patient approach” and do nothing to address current inflation dangers.
Unfortunately, their lack of action has caused the Russell small-cap and micro-cap indices, the iShares Russell 2000 ETF (NYSE: IWM) and iShares Micro-Cap ETF (NYSE: IWC), to trend downwards.
On Wednesday, both these indices closed below their respective 50-day moving averages.
This is not good for growth.
In fact, it’s a huge sign that the “risk on” trade is fading away as we head into the summer slowdown.
The rest of the market will also be affected by both the IWM and IWC‘s negative momentum because risk taking is necessary for a bull market.
Of course, there’s a winning side to this situation and my technical charts show that two sectors are benefitting from all these inflation woes.
Once I reviewed my notes, it was obvious to see why they’re doing so well right now.
In total there are 25 specific stocks that you’ll want to keep your eyes on…
Just like Paul Revere warned Americans of danger back in 1775, three indicators are currently shouting, “Volatility is coming, volatility is coming!”
First, the Volatility Index ($VIX) has been stubbornly trading in the 16-18 range.
If it blows past the 18 level, it’s a very sure sign that a sudden volatility storm could happen at any moment.
Failing to prepare for the worst will leave your portfolio vulnerable to be wiped out if stocks start bleeding red.
The other two indicators that are telling us volatile downside is nearing are the iShares Russell 2000 ETF (NYSE: IWM) and the iShares Micro-Cap ETF (NYSE: IWC).
Both of these indices rolled over as soon as the market opened back up from the long Independence day weekend.
Although this does not mean that all the bullish opportunities are gone, it does show that there is an increased need for us to hedge our portfolios.
Fortunately, today’s market hedge will give you profits while protecting your wealth at the same time.
We’re going to “play the IWM” in two different ways to position ourselves for big gains.
Here’s how to make money from this volatility…