Look, I know the irony isn’t lost on anyone – guy named Bear who spends most of his time hunting bullish momentum setups.
But this week? I’m finally living up to my last name.
The market’s been giving us a masterclass in two-sided action lately, and honestly, I’m loving it.
After months of that relentless grind higher where I was riding every bullish squeeze I could find, we’re finally seeing some real volatility.
Yesterday was a perfect example – stocks gave up earlier gains, VIX spiked to its highest since May, and regional banks got absolutely crushed on credit concerns when Zions got crushed on bad loan charges and Western Alliance plummeted on fraud allegations.
This is exactly why I’m hunting for more bearish setups to balance my book.
Add in the ongoing trade tensions with Trump threatening additional tariffs on China, and you’ve got a recipe for sustained volatility.
Which brings me to Waste Management – a setup I spotted a few days ago that keeps looking better.
The Technical Setup: Why This Matters for Put Buyers
WM is showing two key bearish signals that make me want to get short: a daily bearish squeeze and stacked bearish EMAs. When I filtered the S&P 500 by bearish sentiment in my scanner, this popped up at number five.
First, the daily bearish squeeze.
When you see a squeeze firing on the daily timeframe, you’re looking at compressed volatility that’s about to explode. Think of it like a coiled spring – all that pent-up energy has to go somewhere. When it fires bearish, it means the momentum is shifting to the downside, and that momentum can sustain moves for days or even weeks.
Second, those stacked bearish EMAs on the daily chart.
When the shorter-term moving averages (like the 8, 13, 21) are all stacked below the longer-term ones (like the 50, 100, 200) and trending downward, you’ve got what I call “gravity working in your favor.”
Every bounce gets sold, every rally gets faded.
For put buyers, this combination is gold. The sustained directional move helps offset theta burn while you’re riding the trend instead of fighting it.
The Premium Protection Play
WM is sitting below its point of control with both conditions in place. What really gets me excited is the earnings timing. WM only trades monthly options, which normally makes me hesitant, but going out to November gives us what I call “premium protection.” Instead of theta burning you alive, it actually works in your favor as you approach the earnings event.
The risk-reward here is clean. With a $3 ATR, an $8 out-of-the-money position isn’t crazy aggressive – it’s positioned for a legitimate breakdown.
Your Action Plan
In this new environment where we’re seeing actual two-sided trades instead of that buy-the-dip mentality, having some bearish exposure makes total sense.
I’m watching for any bounce to get better positioning, but this is definitely on my short radar. Sometimes the market hands you setups that are just too clean to ignore – and maybe it’s time this Bear actually acts like one.
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