My indicators have turned definitively bearish, a slight downgrade from last week’s bearish-to-neutral readings, due to the significant downside moves for the major averages over the last week. Yet and still, the market bounced off of the bottom of its trading range rather than breaking down through it. In fact, I think it’s likely that, despite the recent downdrafts, the market will stay hemmed in by the tight channel, at least for the short term.

However, there are four fear factors weighing heavily on the major indices and causing concern among investors. The Greek debt crisis situation, despite last weekend’s referendum, still has not been resolved. Add to that the Iran nuclear weapons negotiations, which remain unsettled.

Thirdly, the collapse of the Chinese stock market, which saw the Shanghai Composite Index drop almost 30% in the last month, is shaking confidence in that region. It bounced back somewhat yesterday, but, while China is trying desperately to shore up its market with new laws against short-selling and regulatory reforms, it hasn’t been able to do so. As China makes massive adjustments, it will most definitely continue to impact global markets.

And, finally, there’s the debt concern in Puerto Rico, which is significant. It boils down to the fact that Puerto Rico simply can’t pay back what it owes and, as a U.S. territory — and therefore effectively part of the United States — we could see that situation affect the municipal bond market. (While there are several instruments that trade around municipal bonds, I’m not inclined to make a trade there until we get a clearer picture about the broader market.)

These are all possible ticking time bombs that could cause the market to implode at any time.

My recommendation is to keep lots of insurance in your portfolio and to start cutting back on your bullish positions. Don’t abandon them completely, as there will be stocks that go up in any market, but it’s a good time to swap any overweight positions for some puts in your portfolio. I have one new put recommendation for you now on the United States Oil Fund LP (ETF) (USO).

Oil prices have actually broken below the low end of their trading range and, what’s more, if the Iran nuclear talks come out the way I think they will, oil prices will drop further. So, this USO option is simply a play on lower oil prices.

Buy to open the USO Sep 17.50 Puts (USO 150918P00017500) at $1.10 or lower. After entry, take profits if the stock price hits $15.90 or the option price hits $2.10. Exit if the stock price closes above $18.60.

Note: This short-term option play is actionable for up to three days after this recommendation. If after three days you still have not gotten the position filled, cancel the order, as the profit probabilities may no longer be valid.

InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. It’s the perfect ‘bridge’ between investing in ordinary stocks and the turbocharged world of options trading.

Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990. Try Power Options Weekly today and receive 2 weeks for the price of 1 for only $19.95.