I’m seeing plenty of doom and gloom in the mainstream financial media nowadays…
Raising interest rates! Selloff! Market bubble! blah blah blah!
That’s all just media talk, you know what really matters? Price!
And let’s take a look at some price action for a minute… Yes, the markets relaxed a bit following the ripping rallies we have grown accustomed to.
But take a step back and look at the big picture… As of last Friday, the market is essentially unchanged on the weekly basis.
Now, it’s really important to see where things stand after a shakeout. What we’re going to be looking for now is where the next big move will be.
Another big thing I’m seeing is that the 10-year note yield has gone up to 1.5%. Think about that for a second, 10 years to get a 1.5% return on your money…
Who would ever think that’s a better option than stocks right now?
Lastly, let’s not forget that yield was at 3% just back in 2018. So we’ve fallen down year over year and, in my opinion, rates are not going to see a stratospheric climb like people think they are.
Bottom line: Don’t let financial media talk scare you, stay focused on price action!
Keep it In the Money,
Trading Tip of the Day: How to Protect Yourself From Market Rotations
It’s no secret that the market has been experiencing quite a bit of chop and it can definitely make it hard to sleep at night seeing all your positions go into the red…
So, what are some ways to protect yourself in these types of environments?
1. Find what’s working.
No matter how red the overall market is, chances are, there is going to be something out there that is doing well. Find that something and do some critical thinking as to why and how it’s outperforming the market.
2. Nail the entry.
What you don’t want to do is chase a stock that’s already out of reach. Ideally you’d want to buy in when a stock has recently bounced off a key support level.
3. Be aggressive in your profit taking.
In a volatile market you want to make sure you’re frequently taking money off the table. The last thing you want is to see your gains erased because you decided to hold on longer than you should have. Take profits early and often!
Lastly, don’t sweat it when the market is red… It’s inevitable — the market will try to take back its money sooner or later.
Stay on top of your trades and protect yourself from downside!
— Greg Guenthner