The financial planning geniuses continue to offer comfort to their clients by telling them to stay calm and to stay in their long positions and weather volatility and that “everything will be OK.”
They are partly correct, everything will be OK. But that doesn’t mean the markets will keep going up from here. They are correct that, at least historically, after a pull back, the markets will continue on to new highs, if you have the time . . .
But what if you don’t have the time? What if you are planning to retire or use your funds in the next few years. Are you willing to “hold” through a 30, 40 or 50% pullback? I’m not!
And, while the market is pulling back, why not profit from that? You don’t even have to do anything exotic or risky, just short the S&P 500 using a quality ETF like SPY, or if you don’t like to short, go long with an inverse (not leveraged) S&P 500 EFT like SH.
The technical analysis of the S&P 500 and other major indexes is very Bearish. I am preparing to go short. I’ll be watching the first few hours of price action Monday morning and if the setups are there, I’ll be short. Or, maybe I’ll have to wait longer. It’s OK, I’m patient. I’ll wait, and I’ll be ready, and my subscribers will get alerts for the trades when they happen.
And if the downturn doesn’t happen? No problem. We’ll go long.
I’ve got plenty of trades just about ready to go, either way.
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Gold looks like it may have found a short-term bottom and be getting ready to head up again, not quite ready, but I’m watching close and will be ready.
Oil charts are similar to Gold and Oil may resume it’s rally as well. Stay tuned for that.
Several large retailers will report earnings this week. Names like; Target, Ross, Costco, Kroger and Big Lots are up through this week. This information could be a catalyst for overall market direction.
It is a light week for planned economic news, the first big report is Jobless claims on Thursday and then Employment Situation on Friday.
Breaking news can change everything, just like it did last week when the administration announced plans for Steel and Aluminum tariffs and sparked fears of the beginning of a trade war that no one wants.
So yes, stay cool, don’t react to volatility, have a plan and trade it according to your pre-determined criteria and rules.
That is what “Staying Cool” looks like for successful traders, not sitting on our hands watching wealth melt away.