The last time I remember seeing this, is back in middle of August. That's when I went long. It was all based on the potential for the Fed to pivot apparently. That all collapsed when daddy Powell took the car keys away. So now here we are again, with hopium in full swing again. @destriero What do you think? Will we have just another repeat of Q2? I know you hate Jeremy Irons in this role, but is this it? Is this finally the time they indicate a slowdown and eventual pause in the hike cycle? I know you have some keen insights on future moves based on implied volatility moving forward...
I've no idea, but I've noted that on prior tops this year the bullish sentiment, outlook and price behavior have appeared to be very strong - only to reverse hard. Maybe this time it's different. There's also some strong seasonality into play for this part of the year, but that's only probabilities and certainly not a certainty. It also seems that seasonality isn't strong for stocks in bear markets versus bull markets: Chart Of The Week - Bear Market Seasonality
That's why trading on news and fundamentals is the worst way to trade. If you're some expert on fundamentals and economic analysis and want to use that to long term invest, can't ague or debate against that, if you're truly that knowledgeable. But I can 100% say without a doubt the closer you get to active day trading and the smaller the time frame you're looking to hold your trades, the worst it gets trying to use fundamentals or news as a major calculation in your trading. Even for people who may want to still fight that statement and 100% disagree, it's like than how do you manage risk? Just buy or sell on the fundamentals or news and hope you're right? or hope there isn't a temporary imbalance in longs or shorts that causes a counter move first to take you out? You still need some type of risk management, which is exactly what technical analysis provides (or at least should be providing if you're using it correctly and properly). Don't get me wrong if you have a trading plan and the technical's also align, than I much prefer to have some major macro economic, event or fundamentals on my side without a doubt. But again that is just a very nice bonus, finding success actively trading off of news and fundamentals is like 100x harder than learning how to be successful with TA (which is already extremely hard generally speaking, we both know very few make it long term).
Relief that earnings hell week is out of the way. No more bad micro-news. Fed this week and then CPI. Lots of talk of a pivot so this may be the last 50beeps hike in the cycle. 12K+ NDX post-CPI is likely.
Powell (aka the Fed) is the scapegoat no matter what they do or don't do... If they raise, they are the destroyer of the economy. If they pivot, their milquetoast responses are the destroyer of the economy. My opinion is that there will be no pivot. The immediate environment is a bear market rally. Take your trading signals. Overstaying your welcome, whether in rally or sell mode, is an additional and significant risk. Take your trading signals. And there is Russia. Taiwan too. If there is a mid-term red wave, it's approximately 60 days before policy adjustments could even be possible. If and could being the operative words. My opinion... You are free to have your own.
I did say "trading" and did not specify actively day trading, which I should have. But if you still hold the same opinion that fundamentals analysis and news is one of the best ways to do that as well, than it just seems odd, but really not much to gain from the conversation. It's just that a lot of people look to you for trading advice and even though most retail will fail regardless, it's still a much tougher path trying to actively day trade on fundamentals and news. Just adds another layer of unnecessary complexity. Obviously not saying completely ignore it or that it can't add an edge(sometimes even a major one an extreme times) but if that is your primary focus most people will likely just end up getting into trapped trades, without some type of consistent baseline understanding of TA. It's different than trading on a longer time line, with the ability to hold. There's a lot of people that use account size and time as their biggest edge whether they realize it or not. Not saying you do at all. Just saying if you can't move down to a smaller time frame and make exponential gains, than there's a good chance your edge isn't as strong as you think and that at least a portion of your edge is coming from account size and / or time(again not directing this to you at all). Just making the distinction between the different types of trading. The weekly regained and we both know that means at minimal some short covering is the most likely outcome. If we couldn't even manage to do that and the regain fails, than market would most likely tank. You didn't really need advanced math, fundamentals or news to see this as long probability, TA was sufficient is my point(again not saying other factors aren't important, particularly for expectation of how much of a move higher we can get) totally understand that.
I've tried most types of investing/trading except futures and by far the best risk/reward for me has been swing trading based on fundamentals and long term technicals. I added a layer of shorter term trading since fall 2020 which can be holds from less then an hour to a few days. Depends on my schedule and if market/sector direction is really clear. I'm not in it for an income and lifestyle wise I don't want to be regularly day trading.