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.
The above information is provided by OptionsHouse for informational and educational purposes only and is not intended as trading or investment advice or a recommendation that any particular security, transaction, or investment strategy is suitable for any specific person. You are solely responsible for your investment decisions. Commentary and opinions expressed are those of the author/speaker and not necessarily of OptionsHouse. Neither OptionsHouse nor any of its employees, officers, shareholders or affiliated companies guarantee the accuracy of or endorse the views or opinions of guest speakers or commentators. Projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature and are not guarantees of future results. Any examples used that discuss trading profits or losses may not take into account trading commissions or fees.