Investing in a Win-Win Market
As the new year begins to take shape and certain market dynamics are beginning to play out has your trading style adjusted? Despite a seemingly volatile 2015, most equity indices are flat for the year. Your trading performance should be indicative of how you have weathered the storm that has taken broad equity markets everywhere, but ultimately nowhere.
Charts Courtesy of Yahoo Finance
The end of the year is upon us. In terms of trading, the year end should just be a phase the market is passing through. However, you should still set a resolution to be a more effective trader or investor. The scorecard is resetting to zero soon. That means prior results, both good and bad, should not be brought into the new year and either give you inflated confidence or extreme despair. The odds of a winning trade are still the same. Make it a point to stick to trades where the most likely outcome is a positive one.
Charts Courtesy of Yahoo Finance
Now that the market has scared investors away from buying the recent dip, will it scare investors into thinking they will miss the next leg up?
Charts Courtesy of Yahoo Finance
The market recovery from its last hiccup has come quickly and strongly. Will this be the latest test of the bull market or has the stage been set up with a trap door? With more earnings reports on the way and a wealth of economic data we just might be able to answer that question soon.
Charts Courtesy of Yahoo Finance
Is the sell off over? Has the market flushed out the weaker players by instilling fear? Or is it just about to entice some sidelined investors into buying into a trap door?
Charts Courtesy of Yahoo Finance
The global sell off has continued and so have the discussions of global market slowdowns and corrections. Typically there are three frames of mind or trading styles that can occur in these volatile times. The important thing is to recognize when the market is providing the conditions for your style to thrive.
Charts Courtesy of Yahoo Finance
With a recent sell off in the equities market, a new quarter on the horizon, and a wealth of economic data coming down the news pipeline there are no shortage of reasons to be actively watching this market.
Charts Courtesy of Yahoo Finance
Is this the volatility you have been looking for?
Be careful what you ask for because you might just get it. In any event, the beginning of the month has shown some swift declines that has caused those investors with their heads stuck in the sand to perk up. Now the hard part; is it a buying opportunity, a short signal, or perhaps nothing more than an opportunity to sell options to collect premium on a spike in volatility?
With economic data giving mixed signals could the next big move be no move?
Recent earnings have shown unexpected growth this past quarter, however the US housing market might be signalling a slow down in spending. Mergers and acquisitions are a sign of spending, but what happens when the merger is between dollar value stores in the US? With the US monthly unemployment report out due this Friday, perhaps we are in for ride to nowhere.
Could another peak in equity markets drag you into the market if you aren’t already in?
While recent chatter has many people believing this equity run is either unstoppable or about to crash, the reality is that this is a trading market that is rewarding very disciplined traders. While bullish traders have certainly been able to profit, so have patient and prudent bearish ones. The catch is that profits are much smaller and that most retail traders might be hard pressed to make money after commissions.