Markets are sending mixed signals.
Over the weekend, President Trump floated new tariff threats tied to Greenland.
He specifically named several European countries that he’d hit with fresh tariffs unless the US gets its way in a Greenland deal. Yesterday, the markets sold off hard. Today, they’re rebounding.
The constant uncertainty is testing investors' patience.
With volatility still running hot, I want to take today to share how I’m trading in this environment.
Longtime readers might be familiar with my Express Trader advisory. In it, I use my proprietary PRO Meter to answer an important question: “Is it time to play offense or defense?”
I’ve only shared an extended breakdown of my PRO Meter once here before, but if you want to know exactly how I’m navigating the chop—and how to get on the right side of today’s market—keep reading.
First, let’s talk about the most important question traders need to ask themselves…
- “What kind of environment are we in?”
I ask myself this before I even think about which individual stocks to own.
Sounds simple, but traders who get this question right—consistently—are the ones who come out on top.
That’s why my process each week begins with evaluating the overall market.
If markets look set for a strong week, I’ll get aggressive and bet on an explosive sector, like tech.
If markets look iffy, I’ll be more conservative and only look for stocks that can perform well even if the indexes are treading water.
And if markets look weak, I’ll batten down the hatches and look for pure defensive trades like dollars, utility stocks, or certain types of bonds.
If there’s one thing I’ve learned, it’s that “forcing” trades is a recipe for disaster. There are times to profit, and there are times to protect your capital.
Rookie traders who try to profit when they should be focused on protecting their positions will learn this painful lesson.
You have to let the market come to you.
- To answer the question, “What kind of market environment are we in?”, I created the PRO Meter.
It boils down the market action into one line on a chart.
From this, I can determine whether the bulls or the bears are in control of prices.
Without getting too in the weeds, the PRO Meter compares the performance of “risk on” sectors with “risk off” sectors.
The risk-on group includes the following sectors: technology, communications, consumer discretionary, industrials, and financials.
The risk-off group includes: consumer staples, utilities, and healthcare.
The PRO Meter is effectively a ratio between these two groups, depicted as a simple line chart.
When this line is rising (like below), it means risk-on groups are outperforming risk-off sectors. This is when I want to get aggressive.
When this line is trading sideways, that can indicate indecision. It’s time to exercise patience and wait for the market to show its direction.
When it’s falling, that’s my signal to exercise caution.
- I’ve used this simple line chart to profit from—and protect—my trades going back to 2021.
Here’s a quick overview of how the PRO Meter has influenced my decision-making over the past four years…
2021: It was clearly a “risk on,” moneymaking environment. I pressed my bets in tech stocks and other explosive sectors and collected strong profits.
But look at what happened at the end of 2021...
The PRO Meter exhibited a “false breakout”—a potentially bearish pattern that suggested it was time to get cautious.
Sure enough, markets sold off soon after. The PRO Meter was clear: 2022 was likely to be a rocky year... and it was.
2022: This turned out to be the worst year for the financial markets since 2008.
Thanks to the PRO Meter, I stayed defensive and mostly recommended energy stocks, which aren’t overly correlated with the overall market.
2023: Toward the end of 2022, the PRO Meter put in a “false breakdown,” the exact opposite of the bearish signal I saw in early 2022.
This was my first clue that the market was about to turn bullish.
Sure enough, 2023 was a great year for stocks. I shifted back to playing offense and enjoyed a very strong year.
2024 and 2025: Two more strong years for stocks. The PRO Meter was moving up and to the right. It was a clear signal to be long “risk on” stocks.
As you can see, the PRO Meter is a guiding light that can orient you on how to approach the market each week.
- What’s the PRO Meter saying today?
You can see that it’s holding up well. This shouldn’t come as a surprise. Right now, the primary concern isn’t market breadth. It’s the relative weakness in tech—the market’s most important sector.
I will continue to closely monitor the PRO Meter. If it comes under pressure, that would tell us that pain is spreading beyond technology stocks.
To sum it up, caution is still warranted. And it’s time to be selective about the trades you do put on.
Of course, one week’s worth of analysis isn’t enough to get the full scope of the entire market. But layered together over time, these weekly readings from the PRO Meter reveal key patterns… and can help you adjust before the market makes its next big move.
If you’d like to know exactly what my PRO Meter is saying each week—and get my three strongest trades based on these readings—you can join us in Express Trader here.
Justin Spittler
Chief Trader, RiskHedge
