Welcome to the “Pain Trade” – Here’s What to Do About It

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“What’s the pain trade, Brandon?” I can hear you ask. Well, it’s the trade that delivers the most amount of punishment to as many investors as possible.

Get familiar with it.

The market is grinding higher, satisfying pretty much nobody. The bulls are left wanting more, whereas the bears who were short the market (like many hedge funds) are forced to cover. Thus, the pain trade is “high” for folks all over the market.

What we’ve seen in recent weeks is a lack of real direction or rotation. And just when you think you have it down, that you have it all figured out… the market moves the other way in a hurry.

The energy sector, as tracked by XLE, comes to mind…

The pain trade can last for a while, but there are indications of when the pain will end. Let’s talk about it…

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