A friend mentioned to me that a lot of people are predicting the market to go much lower starting as soon as next week. Let's take a look: I'm sure I'm not the only person to see a nice wedge formation in place. If we close below the bottom blue line, I think you'll see a lot of selling which could push the markets lower. How much lower and is it going lower? Hard to say isn't it? Just because a guru or chart pattern are suggesting lower prices, doesn't mean the market will actually do that. However, there is a case that we have entered a bear market so it could go quite low. I am careful these days to have limited risk on the down side (or no risk) and never have more short puts than long puts. Evan Rothschild is speaking next week about big market moves and I think this is a perfect time for traders to be aware of the potential of larger moves to the downside and to be prudent with your trades. To hopefully take advantage of the dreaded market crash, I put a bearish put vertical on SPX late today as it takes advantage of selling higher volatility than you are buying and the reward / risk of about 2:1 looks nice. Here's the trade: The max risk on the trade is about $2500 in a $125k account, so about 2%. I likely won't let it get to that if SPX doesn't sell off in the next 30-days so the portfolio risk is well under 2%. This illustrates a point of not taking too much risk for any one trade. If your max loss in a trade is over 2% of your entire portfolio, you are likely trading too many contracts. Make sure that whatever you are trading doesn't keep you up at night worrying about the market crashing. An extra long put can do wonders to help you sleep better. Be prepared to be wrong and have a plan of what you'll do when you are wrong.