We cannot have anything nice. Yesterday’s price gains were a good step forward, but after today we revert back to limbo. Small cap stocks were hit the most today and continues to be a lagging index. Unlike, the NASDAQ 100 who has for the most part held up relatively well. We must continue to wait and avoid trying to be a hero. There are opportunities intraday, but for swing traders patience will be rewarded. There is still a chance we get some follow-through on yesterday’s price gains. Albeit smaller after today there is still a chance. For now, we’ll take this market one day at a time.
Seasonality is swinging to a tailwind for this market, but we still have potential headlines holding back this market from setting a new trend. Whether it be a new downtrend or uptrend we still need to get through more earnings, the Fed, and the election. It will be interesting to see where this market will head over the next 6 months. We do know AAII survey respondents aren’t too optimistic. Hard to really blame them if they are consistently consuming the noise spewing out of Wall Street. Just today there was an article in Business Insider explaining the coming recession. Sure, at SOME point we’ll see a recession. It is easy to look back at history and take an average to plot out when recessions will occur. At this point it is only a guess. Price will always be a leading indicator and until we see a new downtrend occur there is no reason to “predict” a recession. Stick with price.
It is easy to predict what might happen. We can predict a Clinton victory will ensure the market will hit new all-time highs. Look at what happened last year after the Fed raised interest rates. Sure, we battled back. However, it was a tough few months for many market participants who were long the market. There is not one single person who can predict the market with reasonable accuracy. Have a plan and execute the plan. Do not overcomplicate this market.
Today was certainly a disappointment, but we move on to the next day. Keep grinding.
