The Shakedown 12/23/18

 

We got a BLEEDER!

Alright, secret's out, the market has been one wild motherfucker these past few months. Red markets across the globe as the negative news cycle continues. The S&P closed at the lowest levels since July 2017, the picture painted for stocks is not a pretty one at the moment. 

The cycle began with concerns over trade & China and then we added peak earnings to the mix. The Fed only added to concerns with another interest rate raise. While you were figuring out what the aftermath of that would be, we got fresh news of our Secretary of Defense stepping down in protest of Trump pulling out of Syria, Afghanistan and whatever else has transpired since I began typing this paragraph.

From a swing trading standpoint, and a probability of growing your account standpoint, have no shame in staying on the sidelines during these wild times. From a short term trading standpoint, it's tough to make an argument to get long any stocks until we see some sort of major reversal in the indices. 

An old market proverb is that it is like a game of poker except you don't have to pay blinds & can sit out as many hands as you'd like until you get the hand you're looking for. The goal of my swing trading style is to find 30 minute entries into trades that will effect a stocks daily and weekly chart. When the broad market is making such fast moves lower, there aren't many of those opportunities and you may paper cut yourself to death everyday. You simply cannot hold stocks overnight (short term standpoint) because lord knows where we will open tomorrow. It will be at least weeks before we see bases form once again. 

That being said, the active trading community has done a great job of sniping in and out of winners this week. Lots of guys murdering calculated shorts this week, nice job to you guys. I personally think we're too extended to the downside to look for shorts, but I thought that going into Friday and we saw some more panic selling, which really signals how much of a hands off time it is. 

Thankfully, earnings season kicks off in a few weeks.

When the indices puke 8% in a week and 15% in 3 weeks, there aren't going to be many technical setups with everything so stretched. From a long term perspective, there are some deals out there and I think with the sharp selling, we're likely to see more downward action from the best stocks, and it's a good time to start Dollar Cost Averaging in the long term accounts. In September, 3 short months ago, when Amazon shortly became a Trillion Dollar company ticking $2050, never in a million years did anyone think it would be sub $1400 before year end.

A few testing major support that could get crushed if the puking continues

Trade of the week going into the last week of the year is always cash. Lowest volume week of the year. My first boss once said "If you're trading the 52nd week of the year by yourself, you clearly didn't make enough the first 51." He said that the week after me and Ben were sitting alone by ourselves in a room with 250 trading desks in 2013 LOL. 

Merry Christmas and Happy Holidays Everybody! I'm closing the book on my 2018 trading. I generally use this last week to go over my trading throughout the year and figure out how to be better for next year. All things considered an amazing year across the board. Nothing but a constant focus on growth in all areas of life.

We got the TE App coming out January 1st which has taken about a year of work behind closed doors, so I'm very excited for everyone to see the final product. 

Health & Wealth in 2019!


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