6 Bearish Trades to Hedge Against an Upcoming Market Sell-Off

Editor’s Note: The January Barometer is a popular trading theory many swear by. But is it right for your trading style? This is the question many investors are facing at the current moment, especially with a market fueled by so much uncertainty. But Andrew Keene is hoping to reduce the uncertainty that comes with this time of year.

On Friday, January 8, he’ll be revealing exactly what he thinks about the January Barometer, the future of the market, and where the best opportunities are hidden. But this is strictly for the members of his research service, Project 303, and seats are filling up fast. Click here to secure your spot now. You don’t want to miss this…

In the last nine months of 2020, stocks rallied an impressive 72%.

But on the first trading day of the new year, the S&P 500 tanked 2.8% -the worst yearly start in the past two decades.

Ongoing vaccine distribution, a presidential inauguration, the uncertainty of the U.S. Senate… these early 2021 events are pumping volatility into the new year’s market.

Monday’s trading activity is a perfect reminder that the market can’t run up forever.

A correction is coming. And many investors are struggling to protect their portfolios.

But listen up – volatility isn’t scary. Movement like this is exactly what we need to make this year a winning one.

Why protect yourself from a pullback when you can take advantage of it?

See, I have a plan to cash in on a red market. And today, I’m going to share it with you.

These six bearish opportunities will put you in a profit-taking position when the market’s next sell-off hits…

The Top Bearish Opportunities of 2021

We have profited on companies that came out of the woodwork that made quarantine and working from home more bearable (here’s looking at you Netflix, Slack, and various grocery delivery services.)

But now, we are seeing the market pull back – and it’s time to adjust accordingly.

Four sectors in particular are headed for a bearish downturn this year. And within each of those sectors are a variety of moneymaking opportunities…


Without a doubt, in-person retail shopping has taken a huge hit due to the COVID-19 lockdowns. The stores and malls that don’t have a strong online presence have taken the biggest hits of all – which is why our first bearish company is the largest shopping mall operator in the U.S.

  1. Simon Property Group (NYSE: SPG).

This shopping center retail investment trust (REIT) has taken it on the chin. This company owns malls, outlets, and community/lifestyle centers which all took a hit under lockdown orders. With shopping habits perhaps changed for good, this once high-flier looks destined to drop in 2021.

Office Space

In our lifetime, we have never seen this many people working from home – and this doesn’t look like it’s going to change anytime soon. Even with the light at the end of the tunnel, many companies have seen great benefits from having employees work from home.

Businesses are experiencing lower operating costs, and many employees enjoy the flexibility it provides. Working from home to some degree will likely become the norm for many long after COVID is just a distant memory.

That’s why next on our list we have commercial real estate trusts specializing in office spaces.

  1. Real Estate Select Sector SPDR Fund (NYSE: XLRE)

This is an ETF heavily laden with REITs is the second worst performing sector over the past month. Unlike the rest of the market, it has not recovered to pre-COVID levels nor set all-time highs in 2020.

And if you want to dive deeper, we can take a look at the worst performer in the ETF.

  1. Boston Properties (NYSE: BXP)

BXP acquires, develops and manages office space properties. The stock just hit a 10-year low in October and appears to be destined for even lower lows.


Over the past month, energy has been the worst performing sector dropping 6.57%. Energy consumption – particularly oil – has tanked during the pandemic with people traveling less and airlines cutting capacity. The price of oil hit an all-time low in April 2020 and is currently trading at the lower end of its historic range. That’s why we are looking at stock that has led the bearish charge.

  1. HollyFrontier Corporation (NYSE: HFC)

HFC produces jet fuel and with the drastic reduction in air travel imposed by COVID-19, it’s no wonder this stock is leading the bearish charge. Expect more downside in 2021 as this company struggles to survive.

Alternatively, you can trade the entire sector.

  1. Select Sector SPDR Energy Trust ETF (NYSE: XLE)

XLE is in a similar pattern to HFC. As you can see from the chart above, this ETF took a massive dip in March and has been slow to recover, leaving it a lucrative profit opportunity.


People are watching more television, but not the normal advertisement laden TV of the past. Many are turning toward streaming services like Netflix, Amazon Prime, Hulu, and YouTube TV, making television companies essentially obsolete.

  1. Nielsen Holdings (NYSE: NLSN)

NLSN hit an all-time low in April 2020 and more downside is likely in 2021,

Now, let’s talk about how we plan to profit. The easiest way is to play the downside, or to “short” the stock. This essentially means “putting the battery in backwards” by selling the stock first and buying it back at a lower price for a profit.

For example, if you were to short XYZ at $50 and XYZ drops to $25, you buy it back at $25 netting a $25 – a 100% profit.

Alternatively, and the way I do it, is by buying a 30-90 at-the-money (ATM) put option. As the stock price drops the value of the put option increases.

For example, if you were to buy an XYZ March 2021 $50 Put for $1.00 and the stock drops to $25, your put option would be worth about $25, a 2400% ROI.

Puts can hand you fast cash too. Just yesterday, this group of readers had the chance to score 25% with a put on Twitter in 10 minutes.

I show readers exactly how to put these fast-cash trades – both bullish and bearish – into your trading account every Wednesday-Friday in a private, members-only Zoom session…

And you can become a member today.

Click here to learn how – my next session kicks off tomorrow at 9 a.m., and I’d love to see you there.

Until then,

Tom Gentile

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