There is no way to sugar coat it — last week was a horrible five days in the stock market with the S&P 500 falling 2.2 percent ahead of the long weekend. That move lower, added to the index’s retreat thus far in 2016, is making it one of the roughest starts to the trading year in decades. Needless to say I am feeling much better that we exited a number of of positons last week, preferring to live to fight another day.

During the last few weeks, I’ve written about the factors that have been weighing on the market — the slowing domestic economy, concerns about the continued economic contraction in China and related ripple effect and currency headwinds. The market also was weighed down by scaled back expectations for both the global economy and earnings. As I wrote last week, these downward revisions to expectations can be painful at times such as now.

A heavy drag on the stock market last week was oil prices, which continued to come under pressure due to a growing oil glut. The causes include weakened demand and rising supply, which is likely to grow further as Iran begins exporting again after the lifting of economic sanctions against it. I expect oil prices to remain significantly lower year-over-year, which probably will lead to reduced earnings expectations, capital spending cuts and, in all likelihood, some degree of industry consolidation in the coming months. This is already starting to happen as we saw on Friday, when BHP Billiton announced it will book a $4.9 billion after-tax impairment charge against the value of its U.S. shale assets to reflect its reduced price projections and revisions to its development plans. Yesterday, while the stock market was closed, oil moved below $29, which suggests we only have begun to see the damage ahead.

We also saw additional signs of weakness in the domestic industrial economy via the December Industrial Production report. As you can see in the below chart, 2015 was a year of falling industrial activity in the United States. In fact, industrial production fell into contraction territory for the last two months of 2015. Despite what President Obama said in his State of the Union address, there is little reason to think the domestic economy is “strong.”

As these issues filter through the market leading to revised expectations for the economy, we’ll be moving further into an earnings season that is likely to be filled with negative revisions for expectations during the coming quarters.

I expect the market turbulence will continue.

Amid that turbulence, let’s enter two viable ports that should allow us to make some profits in the short term.

One such viable port in the storm is in one of the least risky assets out there — U.S. Treasuries. Given the rash of weaker-than-expected economic data and the lack of inflation confirmed by last week’s PPI report and probably by this week’s CPI report, treasuries are bound to attract increased attention. From my perspective, one of the best ways we can invest in treasuries is through the iShares Barclays 20+ Year Treasury Bond ETF ([stock_quote symbol=”TLT”]). Exchange-traded funds (ETFs) typically offer modest gains — not the big potential we strive for here at PowerOptions Trader with call options. My recommendation for TLT exposure are the TLT February $130 calls (TLT160219C00130000) that last traded at $0.80. The February strike date gives us ample time for additional economic data that will confirm the slowdown and get us through the bulk of the December quarter’s earnings. Given the prospects for a volatile market, let’s keep a tight rein on risk management and set a protective stop for this call option at $0.50, which will help limit potential losses if the market rebounds.

During the last few months, the monthly Industrial Production report has shown a continual drop in utility production due to the unseasonably warm weather. However, the National Weather Service is now reporting that a “frigid air mass” will make its way across the Northern Plains toward most of the eastern United States early this week. Later this week, we will see snow hitting most of the country with a major storm that could deliver up to a foot of snow in parts of the East Coast heading into this weekend.

To me, this once again means consumers will be turning up the heat to stay warm, which will result in a rebound in utility production. Utilities have an added benefit in that they are another port in the market storm. I’ve parsed through the financials of several utility stocks, including Southern Co. ([stock_quote symbol=”SO”]), Duke Energy ([stock_quote symbol=”D”]), PG&E ([stock_quote symbol=”PCG”]) and others to find the right geographic exposure combined with the right strike price and ample trading volume. That screening led me to PPL Corporation ([stock_quote symbol=”PPL”]), which delivers electricity to customers in Pennsylvania, Kentucky, Virginia and Tennessee — areas that will be hit by the snow and freezing temperatures — and FirstEnergy Corp. ([stock_quote symbol=”FE”]), which serves markets such as Ohio, Pennsylvania, Illinois, Michigan, New Jersey and Maryland.

To positon ourselves to profit from the return of frigid temperatures and snowy weather, add the PPL February $35 calls (PPL160219C00035000) that last traded at $0.25, with a $0.15 stop, and the FE February $32 calls (FE160219C00032000) that last traded at $0.65, with a $0.45 stop. Given the current market environment that could see a dead cat bounce on modest news, these risk management measures should help limit potential losses.

My expectation is the short trading week will be volatile, not so much due to the economic data we’ll be getting, which is mostly housing related, but because of the earnings reports ahead. Following last week’s results from Alcoa ([stock_quote symbol=”AA”]), Intel ([stock_quote symbol=”INTC”]) and others, as well as negative pre-announcements from GoPro ([stock_quote symbol=”GPRO”]) and other recent high fliers, my new recommendations should help us sleep at night, especially with our risk management actions. I may send you a special alert if conditions warrant action before next week’s scheduled alert.