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I’ll get straight to it — I made a significant portfolio move that I want you to understand.
I cleared almost $400,000 from my portfolio. That wasn’t an accident or a panic move. It was deliberate, calculated and part of a defensive strategy I’ve been building as this market sets up for what I believe could be a rough third wave down.
The decision comes at a time when volatility remains elevated and index options continue to swing in a way that tells me traders still aren’t convinced about direction. When the VIX hangs this high for this long, it becomes even more important to stay nimble and protect capital.
Let me walk you through my thinking and why I’m positioning this way right now.
The Wave Structure That Has Me Concerned
If you look at the market action from the recent highs, we’re potentially seeing a classic wave pattern unfold. The first wave down was sharp and decisive, the kind of move that shakes traders awake. The second wave — which is likely what we’re in now — tends to be that deceptive recovery phase where prices grind, drift higher and give the impression that conditions are stabilizing.
The problem is that this type of structure often leads into a much more aggressive third wave. That next leg down is usually the most emotional, the most impulsive and the most damaging for traders who convinced themselves the worst was over.
That’s the wave I’m preparing for. It’s not guaranteed, but the risk is elevated enough that I’d rather be proactive than reactive.
Keeping cash on hand gives me room to maneuver without being forced into trades I don’t want. It also allows me to step into opportunities later at far better prices if the third wave materializes.
How I’m Adjusting My Options Positioning
My options strategy has shifted to match this defensive posture. With volatility high, premium selling becomes attractive — but only if it’s done safely and with clear risk controls.
That’s why I’m focusing more on bear call spreads and angling myself to the downside, because these structures let me take advantage of elevated premium without exposing myself too heavily to bullish reversals.
When I sell puts, I’m keeping them very low delta. In a market with this much uncertainty, I don’t want to be anywhere near the current price when selling risk.
Iron condors can still work but only if the put side is pushed out far enough that I’m not relying on bullish support to hold.
The overarching goal isn’t to nail the exact bottom or catch every move — it’s to stay out of harm’s way while continuing to grind and trade methodically. There’s no reward for being brave in a choppy, corrective market, but there’s plenty of reward for being patient, disciplined and selective.
Could we still see intraday squeezes? Absolutely. With the way index options have been bouncing each morning, it wouldn’t surprise me to see sharp rallies even inside a broader downtrend. But for now, the bigger picture still points toward caution, and that’s why raising cash and tightening exposure is the right move.
I’ll see you in the markets.
Chris Pulver
Chris Pulver TradingÂ
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Â
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