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This morning, I am recommending a bearish trade on Box, Inc. (NYSE:BOX), the enterprise content management platform provider.

My indicators are giving neutral readings this week, a slight upgrade from last week’s sell signals. But while the market has recovered some of its recent losses over the past few sessions, I still think that caution is warranted.

The U.S. economy continues to be the best in the world, but it does have its problems, and there are a few warning signs I’ve been watching lately that I want to go over today.

Oil, Interest and Gold

First, crude oil prices have collapsed this month from about the $63 per barrel level all the way down to a low near $50 per barrel. This has had a negative impact on a lot of energy and oil-related companies and has the potential to interfere with the credit markets if oil falls further.

This is a disinflationary event, which unfortunately is the type of occurrence typically seen ahead of recessions.

Second, the 10-year Treasury note yield is now approaching the 2% level. While this is good for mortgage rates and the housing market, it is starting to reflect expectations for slower growth going forward.

Of course, slowing growth means a slowing economy, which is another warning sign of recession.

Third, gold prices are moving sharply higher. They’ve jumped about 4% over just the last two weeks and are once again trading above the $1,300 per ounce level.

This tells me that traders really are desperate to get some protection in their portfolios.

As all of these issues have developed, there has been a lot of talk about the Federal Reserve potentially lowering the fed funds target rate. The fact that the Fed is thinking about lowering the target rate shows that the economy isn’t as strong as U.S. markets are making it look.

Daily Chart of S&P 500 Volatility Index (VIX) — Chart Source: TradingView

Even with all these warning signs, the S&P 500 Volatility Index (VIX) closed below the 16 level on Thursday. This tells me that investors are too complacent right now, especially in the face of so many bearish warning signs.

When the market is complacent, we  want  to be defensive, and a bearish play on BOX is a good strategy.

BOX Could Turn Around

If you look at the chart below, you can see that BOX jumped at the start of June after setting a new 52-week low. BOX reported better-than-expected earnings, showing a lower loss than was previously expected. It also beat revenue expectations according to Zacks. That sent the stock higher.

Daily Chart of Box, Inc. (BOX) — Chart Source: TradingView

However, BOX also got some bad news this week. In a press release from Bronstein, Gewirtz & Grossman, LLC, a corporate litigation boutique, the law firm announced it was investigating the company on behalf of some of BOX’s investors.

The group is looking into whether BOX and/or its directors or officers have violated federal securities laws. As more news develops, this could prove bearish for the stock.

I also think BOX could move to retest its recent low. While its earnings were better-than-expected, the company did still report a loss. In the current market, it would need to make a stronger case for itself to continue rising.

Because it is up right now, we have an excellent chance to take a bearish position. For that reason, I’m recommending a put option.

Buy to open the Box, Inc. (BOX) Sept. 20th $16 Puts (BOX190920P00016000) at $0.85 or lower.

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InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. 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.