What does everyone think of this market lately? Last Thursday the market closed at an all-time high. Then, after last Friday’s Job report came out and the market had a particularly strong market open, the tone suddenly and dramatically changed. Over the weekend, I read several articles highlighting how the bull market’s momentum had suddenly disappeared and reversed. I even saw a respected market journalist quoted Monday saying … “he was scared of the market right now” and how “going to cash (selling all equity exposure) doesn’t seem like a bad idea.”
The market looked downright ugly! Then what happened? This market took all of about twenty minutes to turn bullish, crossing back over the 50 day MA and beginning a new ascent. The Federal Reserve release of the minutes of the March meeting added fuel to the market fires today, with Janet Yellen telling reporters to focus on the Fed’s statement saying rates would stay low, and ignore the old 6.5% unemployment rate threshold which was now meaningless.
It really makes you wonder what these ‘pros’ on TV and in the print media actually know about the markets in the short term.
To me, whether they are great, average or actually inverse market indicators doesn’t really matter. What does matter is that you as a trader take responsibility for your own investment decisions. This means creating a disciplined process to your investment decisions and having the discipline to stick with it. Trying to time the market and jump on and ride bull markets and jump off when the media is ‘scared’ will be a losing proposition in the long term. Better to be prudent on allocation of your investment capital so that any market downturn doesn’t result in a devastating loss. Losses will cloud your judgment. It’s just human nature. Defining your risk going into the trade is critically important. The responsible use of Options can provide you with this defined risk approach.
Don’t rely on the market pundits you hear on the airwaves. Rely on yourself as an informed and educated investor.
To that end – Next Tuesday, Dan Sheridan from Sheridan Options Mentoring and I will present a webinar discussing the pros and cons of various strategies which can be employed in an IRA account. Since tax day is also next Tuesday April 15th, the topic of IRA trading is particularly timely. Whether you are a newbie to Options trading or an experienced advanced trader I encourage you to attend. It promises to be a lively debate.
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