It’s the word on everyone’s lips this week: Recession.

The latest Bloomberg model puts the probability of a recession at 38% (or 19 to 31, great odds if you’re betting). Economists are split, with some saying the recession is coming, others saying it’s not, and a third camp saying it’s already here.

But whether we slip into a recession or just remain mired in a bear market, it’s safe to say traders and investors alike are starving for opportunities to grow their money right now.

And while all of the major market benchmarks are in the red, there are plenty of places to stash your cash right now - we’ve talked about a few of them already over the past few weeks, including grocery and healthcare stocks that have historically performed well in recessionary periods.

But those aren’t the only sectors where you can find capital appreciation in tough times…

Take Advantage of a Strengthening Dollar with this USD ETF

The dollar has been rising against the euro (its natural currency pair) steadily over the past year, up 16% since July 2021. 

As you can see, the dollar has achieved near parity with the euro - and that’s thanks to the Fed’s commitment to raising interest rates.

As the old saying goes, “Money goes where money grows,” which means investors looking to make money on a currency investment will do better when interest rates are going up, so the dollar is attracting investors like we haven’t seen in years.

And that’s been great for the Invesco DB US Dollar Index Bullish Fund (UUP), which tracks the performance of the US dollar. It’s up 11.51% in 2022, while the S&P 500 benchmark is down 19.33%

An Easy Way to Profit From Bear Market Volatility

It’s no secret that volatility has spiked in 2022 as the bears have taken control of the markets.

Here’s a chart of the CBOE Volatility Index (known as the VIX, or the “fear index” - which measures expected price fluctuations over the next 30 days over the last year - July 2021-July 2022. 

For perspective, take a look at the chart from the previous year, from July 2020-July 2021…

You’ll notice far fewer swings, fewer spikes, and longer periods of low volatility…

But to get even more perspective, let’s look at July 2019-July 2020…

The left side of the chart depicts “normal” volatility in the pre-pandemic bull market. Volatility is low, and the line is relatively smooth, with very few spikes - until COVID hit.

In short, we’re locked into a period of high volatility and will likely remain there as the bears continue to push markets down and recession fears weigh on stocks.

Smart investors can look at the iPath Series B S&P 500 VIX Short-Term Futures (VXX), which is an ETF that tracks the VIX. 

It’s up 19.59% YTD, a full 40 points better than the S&P:

It’s Still a Good Time to Short the Tech Sector

After powering much of the run up the last 13 years, the once-vaunted FAANG stocks - Facebook, Apple, Amazon, Netflix, and Google - continue to decline in this bear market, pulling the entire Nasdaq Index (which is heavily weighted toward these companies) down 27% YTD.

The easiest way to profit from a decline in tech is the ProShares UltraPro Short QQQ (SQQQ), which tracks 3x the inverse performance of the Nasdaq. 

It’s up over 80% YTD - and has peaks as high as +122% in recent weeks. This will continue as long as the Nasdaq declines.

At Stock Navigators, we teach you how to tell when it's time to go short... or go long... click here to learn more about it.

As Recession Fears Kick into High Gear, These ETFs Will Keep Clobbering Markets

Let’s face it, shorting isn’t for everyone…

Going short requires a margin account with enough cash to cover 150% of your position when you borrow shares of a stock in order to sell them short.

Or you’ve got to know how to trade options - and while trading put options doesn’t require margin, it does require special clearance in your trading account.

But there’s another way to make money when markets go down… 

An Inverse Exchange-Traded Fund (also known as a “bear” or “short” ETF) is an investment vehicle that uses a basket of derivative investments to track the inverse performance of an underlying benchmark.

They’re not only a great way to profit when markets go down, they can also help you hedge your portfolio during a bull market.

But before you take the plunge on inverse ETFs, there’s something you should know…

Inverse ETFs usually come in three varieties: -1x, -2x, and -3x.  

A -1x ETF tracks 1:1 with the underlying, while -2x and -3x use leverage to double or triple the inverse results…

So at 1x, if the underlying goes down 5%, the inverse fund is designed to go UP 5%. -2x and -3x funds would go up 10% and 15% respectively.

The danger of using leveraged inverse ETFs is that the more leverage you take on, the more susceptible the fund is to what’s known as a tracking error - the difference between the actual returns of the fund and the underlying benchmark.

For that reason, inexperienced traders should stick with 1x inverse ETFs to avoid the risks involved with leverage.

It’s also important to note that inverse funds are designed to give a -1x return of the underlying benchmark for a single day. The longer you hold even a -1x ETF, the more likely your position will experience a tracking error. Keep that in mind.

That said, here are some of the best inverse ETFs on the market…

ProShares Short S&P 500 ETF (SH) - tracks -1x the performance of the S&P 500. It’s the most popular inverse ETF on the market, with $3 billion in assets under management. 

As of this writing, the ProShares Short S&P 500 ETF is up 19.82%, just a hair off the -19.74% the S&P has lost over the same time period.

ProShares Short QQQ (PSQ) - PSQ provides investors with -1x returns of the Nasdaq benchmark, which has taken a serious beating in 2022. That should continue as the bear market squeezes speculative capital (dumb money) out of the markets for the next few months.

Year to date, PSQ has handed investors 31.12% while the Nasdaq Index has lost 28.58%.

ProShares UltraPro Short QQQ (SQQQ) - As noted above, the Nasdaq has taken a beating this year, the worst performer of the major market benchmarks. If you’re comfortable taking on leverage, the ProShares UltraPro Short QQQ targets a -3x performance of the Nasdaq Index. 

You’ll notice that the price of SQQQ is much more volatile and prone to fluctuations than PSQ - that’s the downside using leveraged ETFs.

The upside? Year to date, SQQQ has seen highs of +122% when the Nasdaq composite hit lows of -31% on the year.

But as you can see on the chart, tracking error can eat into your returns, especially when the trend reverses and the benchmark moves to the upside. 

In mid-March, when the Nasdaq made a short-lived 13% gain, SQQQ crashed, dropping 40%.

As always, make sure that any leverage you choose to take on is in line with your own personal risk tolerances.

Of course, you can use technical analysis to trade inverse funds as well. At Stock Navigators, we use Echo Mapping to trade technically. It works for stocks, cryptos, bonds, ETFs… all sorts of investments - click here to learn more about it.

The Easiest Way for Beginners to Profit from Any Market Decline

It’s anyone’s guess whether the markets are going to move from bear territory into a full-blown recession…

Economists are split, with some headlines claiming a recession isn’t in the cards, while others are ringing the alarm.

But either way, there are still opportunities to make money in the markets.

Grocery stores will continue to bring in customers as the economy contracts and prices rise thanks to spiking inflation. After all, people still need food, household goods, and other staples

Founded in 1883, The Kroger Co. (KR) has been in business for 139 years.

It ranks #17 on the Fortune 500 rankings of the largest US corporations in total revenue, and is the 3rd largest general retailer on the planet.

KR makes a whopping $137 billion in annual revenue.

During the 2007-2008 financial crisis, this company went on a buying spree.

They acquired Scott’s Food & Pharmacy, as well as 20 different locations from their competitors. 
Not to mention, while other stocks were falling, KR rose 10% from 2007 to 2008.

If history repeats itself, KR will be a good stock to own.

Ever since April, shares have been down 21.7%, meaning right now could be a good time to add KR to your portfolio.

The second company on the list is Costco Wholesale Corp. (COST).

Although it’s the youngest company on the list, founded in 1983, Costco is #10 on the Fortune 500 ranking of the largest US corporations by total revenue.

It’s also the 5th largest retailer in the world…

The world’s largest retailer of choice and prime beef…

The world’s largest retailer of organic foods…

The world’s largest retailer of rotisserie chicken…

And the world’s largest retailer of wine.

That’s a whole lotta world’s largest for one company.

Not to mention, Costco is known for its high-quality products and discount prices - and is committed to keeping prices as low as possible during inflation.

Its famous hot dog combo - served at every store - is a great example.

Despite rising inflation rates, in 1985 Costco president Craig Jelinek refused to raise the price, saying, “If you raise the effing hot dog, I will kill you. Figure it out.”

To this day, a hot dog + soda combo at Costco is just $1.50. And the company has confirmed it will stay that way in 2022.

COST has lost as much as 38% of its value in 2022, meaning this multi-industry powerhouse is currently trading at a big discount.

Last but not least is Walmart Inc. (WMT).

Founded in 1945, today Walmart boasts a gigantic $571 billion in annual revenue.

It is the world’s largest company by revenue, as well as the world’s largest private employer - with 2.2 million employees.

It’s currently trading at levels we haven’t seen in two years.

Considering that WMT is the largest corporation on Earth, it may be highly profitable to buy shares at these two-year-low prices.

There you have it, the top three grocery stocks to buy during a recession.

All three are respected industry titans who have prospered throughout every single recession in the past three decades.

Ready to Add KR, COST, and WMT to Your Portfolio? Wait Until They Hit The Buy Zone

If you want to know the perfect time to jump into these three grocery titans, you need the blue box on your chart…

Because Money Zones are the best way to get in BEFORE a stock reverses and heads to the upside.

MZ Trader readers get our best Money Zone trades every single month - when a stock hits the Buy Zone, we’ll send you an email with exact instructions on how to get in and out of your trades for maximum profit potential.

And just like the Costco hot dog, we’re not raising the price of MZ Trader during inflation - in fact, we’ve cut it to its lowest price ever, just $99 for the year.

3 Grocery Stocks to Buy During a Recession

Recession worries are rising, but amidst these growing concerns... three "must buy" grocery stocks are starting to stand out.

The Wall Street Journal reports that mortgage rates have hit a 10-year high.

5/1 adjustable rate mortgage loans (ARM)... 

In fact, the 0.96% rate increase this past March is the largest 5-week spike we’ve seen since May 1987.

Black Monday happened, the market suddenly crashed, and worldwide losses totaled $1.71 trillion.

That’s because when mortgage rates jump up this fast it’s always a recipe for disaster.

Because sooner or later, there has to be a pullback or recession. 

People who are used to low interest rates will stop buying houses, and this will cause demand to drop.

Someone who bought a house with a 2% rate… will probably not buy another house with a 5% rate.

And eventually, mortgage rates will hit a number that’s so high - possibly 10% to 12% - that people will just decide not to buy a house at all.

All signs suggest we will see some sort of pullback in the near future.

That could be 3 months from now… or as far as 18 months from now.

That’s the thing with these sort of macroeconomic forces, it takes time before we see the consequences.

That’s why at Stock Navigators, we’re always paying attention to the overall market.

Everything is connected, and we track the housing market using technical analysis.

The type of technical analysis we teach is called Echo Mapping. 

It works for all assets, real estate… crypto… stocks… you name it, it works for it.

This is how we’re able to prepare ourselves for any curveballs the market throws at us.

And we’ve recorded a special podcast, How to Use Echo Mapping to Spot Winning Investments Before They Take Off, to show you exactly what Echo Mapping is and how you can start using it today.

Right now, you can watch this podcast for free - click here to watch the Echo Mapping podcast.

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Get started on your path to finding success in any market with expert advice. Here at Stock Navigator’s we have one goal: create a new generation of successful traders and investors – and it’s your turn.

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Our latest on the markets

As Recession Fears Kick into High Gear, These ETFs Will Keep Clobbering Markets

The Easiest Way for Beginners to Profit from Any Market Decline

3 Grocery Stocks to Buy During a Recession

Think Twice Before You Buy a House in This Economy

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