On June 9, the eve of the CPI announcement, the stock market began to fall.
The Dow Jones index closed down 639.10 points, or 1.94%, at 32271.80 points on June 9;
The S&P 500 closed down 97.95 points, or 2.38%, at 4017.82 points on June 9;
The Nasdaq Composite Index closed down 332.05 points, or 2.75%, at 11,754.23 points on June 9.
At 8:30 a.m. on June 10, the CPI was announced at 8.6%, continuing to hit a 40-year high. The three major U.S. stock index futures continued to fall, the Nasdaq futures fell more than 2%, and the Dow futures and S&P 500 futures fell about 1.5% and 1.7% respectively.
It was the first break below the support level since the rally began on May 25. At the same time, it is also a new low in the past two weeks.
Interestingly, the stock market has been rocking up and down for two weeks, with no major gains or major declines. But starting at 1:00 p.m. on June 9, it turned around and kept falling, with no turning back at all.
CPI rose again. It shows that the Fed's rate hike may not have any obvious effect. So does it mean that in the future, the Fed will adopt a more favorable tightening policy?
Recently, I have been worried about the market falling, so I have been adopting a hedging strategy on googl and tsla. The so-called hedging is to set short and long positions at the same time, and then set stop loss, but not set profit. For example, on June 7th, I set up a tsla hedge order at 728, and on June 8th, tsla rose by more than 20 dollars, which made me 7K (I set up a googl hedge order before the market closed yesterday afternoon, googl before the market today Down more than $50, expect a profit of more than 10k today).
I have been using this hedging method for 1 month and it feels very effective.
How do you avoid the risk of falling markets?
Does anyone have a better suggestion?
Hope for a better answer, thanks.
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