I just wrapped my the Big 3 segment on Schwab and had to share some contrarian thinking with viewers:
Everyone’s buying this bounce. Here are three trade ideas going the other direction.
When markets gap up after geopolitical chaos and everyone breathes a sigh of relief… when “defensive” plays start rolling over just as volatility spikes above 20… when major financials can’t hold breakouts despite being in a higher rate environment…
That’s when you know the real opportunity is on the other side.
I outlined three contrarian trade ideas that go directly against today’s “everything’s fine” narrative:
The “fake financial strength” fade – Major bank rolling over hard. Everyone sees financials as beneficiaries of higher rates, but they’re missing the private credit pressure and lending slowdown. Trade idea: When this thing tests key support, consider put spreads out to May 15th for those looking to play the breakdown.
The “broken entertainment kingdom” setup – Major media company just printed another failed test at psychological resistance. Management chaos, momentum dead, and sitting right on a technical cliff. Trade idea: If it breaks through that key level, put spreads for April 17th could capture the move lower.
The “defensive rotation reversal” – Here’s the kicker: Fast food giant is supposed to be the safe haven play. But defensive trades are getting hit just as volatility explodes. Trade idea: Put spreads for April expiration to play the breakdown of this “protective” trade.
Look, I know what you’re thinking. “Don, VIX is above 20 – shouldn’t we be looking at defensive plays?”
That’s exactly why these setups caught my attention.
When the obvious defensive play starts breaking down during a volatility spike, that’s not a contradiction. That’s a signal that something bigger might be brewing.
WATCH THE FULL SCHWAB BREAKDOWN HERE
To your success,
Don Kaufman
