Volume was up across the board as stocks fell across the board. Led by the NASDAQ Composite index the major market indexes finished lower on the session albeit off the lows. We did not see the Russell 2000 lead the market lower, but the index did shave off 39bps and remains under its 50-day moving average. Fears over a slowing economy the bond market has seen bond prices rise pushing rates not seen since 2017. Whether or not you believe we are about to hit a recession your focus must remain on the price action of your stocks. We do need to consolidate the move off the December lows. Keep an open mind and realize anything can and will happen. As long as you are prepared and do not trade off emotion you will succeed. Most get overzealous and trade too often and carry too large of a position ruining their account. Stay grounded and focused on what matters. Leave everything else behind. This market will go wherever it wants to and we are here to ride along.
After 10 years of economic expansion we have yet to encounter a recession. This is unprecedented and we continue to set records. At some point we will run into a recession. Does the market HAVE to fall? Let’s not forget, we did not have a recession in 2011 and the S&P 500 fell more than 20%. Only a late day rally saved the market from being called a “bear market.” Other rough patches were seen in 2015 and 2016. Remember the hoopla with “Brexit?” Even the 2016 election was supposed to bring on the pain train and yet the market prevailed. Regardless of what you think might happen probably won’t. While you might feel smart by “knowing” where the market will head next in the end you will look foolish. In the meantime, avoid looking foolish and join Big Wave Trading!
This week in sentiment we continue to see the majority of respondents remain split right down the middle. AAII survey showed 39.6% of those who responded were Neutral on the direction of the market over the next 6 months. That number held steady week over week. However, almost all of the movement shifted from the Bull camp to the Bear camp. Bulls ended the week at 33.2% while Bears ended at 27.2%. Nothing out of the ordinary here for this market. Unless we get an extreme move one way or another expect to see these sentiment numbers remain tame.
It has been one heck of week for our trading. There are opportunities and those who are well-prepared will be able to take advantage. Have a great ending to the first quarter!
