It’s Not How Markets Act, It’s How They React!

What a year it’s been!

We’re almost halfway through March, just about one full year since the Coronavirus pandemic flipped the United States on its head…

Don’t worry, this is NOT a Covid-19 thinkpiece… I just want to talk about the reactions in the market from March last year to March this year.

This time last year, if you told most people that the major averages would be consistently hitting new all-time-highs they would think you were crazy.

Originally there was panic that we were going to go into a deep recession…

But look at where we are!

Following the steep pullback of last March, the major averages have ROCKETED back and pushed to new highs time and time again.

Much of this has been led by the tech-heavy Nasdaq… Work from home (WFH) names and FANG+ stocks are the stars of the stellar market performance from the past year.

And recently, we saw a bit of a rotation out of these tech stocks and into some more optimistic ‘reopen’ names.

If you pay attention, you can start to understand how the market reacts to different news…

Understanding these reactions is extremely important when it comes to getting ahead of the curve to book BIG gains!

Bottom line: Don’t worry too much about how the markets act, pay attention to how they react instead!

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Trading Tip of the Day: Tune Out The Noise

Greg Guenthner

Just like people, the market often overreacts to situations. These reactions are almost always amplified by mainstream media sources…

If all you did was watch the news, you’d probably think the world was ending. And with financial news, the stories can sometimes be even more dramatic…

Here’s a secret, the purpose of mainstream financial media outlets is to sell ad space and keep you watching. So be careful that you’re not getting all your news from just one source.

Among all the noise, there are little nuggets of truth. So ideally you’ll want to get your news from a multitude of different, reputable sources.

That way you can piece all of the information together and figure out what is going on for yourself.

Adopting this type of critical thinking into your life can carry huge benefits for your portfolio…

Over time you’ll start getting better at understanding certain reactions and positioning yourself beforehand to profit.

So tune out the noise and take a step back to look at things from multiple perspectives, you might be surprised to see things aren’t as dramatic as they are made out to be!

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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