How to Trade These Markets
While these markets look to be starting to reverse trends, it is critical that we understand how the market moves during reversals and also understand position/money management.
Getting short stocks and long precious metals in the long run could work out very well. But if you understand the price action that typically happens during reversals, you know that the stock market will become choppy, and we could see the recent highs tested or possibly even a new high made before price actually starts a down trend -- and the opposite situation for gold and bonds. Drawdowns can be huge when investing, and they are the reason I don't just shift directions at the first sign of a trend change.
Price reversals are a process, not an event. So it is important to follow along using a short-term time frame like the daily chart and play the intermediate trends that last four to 12 weeks in length. By doing this, you are trading in the direction of the most active cycle in the stock market, and you're positioned properly as a new trend starts.