As expected the Federal Reserve raised rates again yesterday. The move comes as no surprise to the market as it was long expected the central bank would raise rates. We saw stocks bounce around but ultimately close lower on the session. Small caps were able to see gains as the Russell 2000 gained .57%. Volume across the board was higher on the exchanges as afternoon volatility post rate announcement had traders trying to catch every move. The market is still in this consolidation period, but we must be aware of key support areas and react when necessary. Our stops are in place as well as our hedge positions if we see this market turn lower.
Futures this morning are indicating a much lower open. Trade wars are showing up once again as a main talking point. FB is not helping matters too with Zuckerberg out apologizing regarding the misuse of users’ private data. Are you really surprised FB had a data breach? We are not. If this selling turns into something more sinister we have our stops in place and hedges. There is no telling what we will see from this market. It is anyone’s best guess. We are not going to guess. Proper risk management is all we need to succeed in this market. Ignore the noise.
AAII sentiment survey has gone to the neutral camp. Bulls ended the week at 33.23% while Bears ended the week at 28.49%. At this rate it won’t take much to see Bears get back above 30% if this selling gets worse. We’ll be watching how this market unfolds and react accordingly. Most will be trying to catch every move, overtrading, and losing capital. Don’t lose your capital trading by the seat of your pants.
We hope your trading is going great! The increase in volatility has been fun and more normal. Last year certainly was not what you typically see, but produce some fantastic gains. What the future holds is unknown, but we have the tools in place to succeed. Have a great day!
