While this rollercoaster of a market continues down the same track the professionals are coming up with more and more reasons why. Read some reports. Listen to CNBC and Bloomberg. You will hear it all. The Fed’s expectations, Oil, China, possible recession, slowing economy, Junk Bond interest rates, EFT’s market manipulation, unemployment, the weather, the list continues. Every professional has a different reason. If you are new to the market, stop scratching your head and get used to it. These opinions are coming from CEO’s, Economist, Analysts and Professional Traders. Who do you listen to? This is why I listen and take it all in with a grain of salt. I do not rely on technical data because the government and professionals are putting it out. I’m a big believer in manipulation and intentional deception. Since I heard every reason for this market behavior from everyone under the sun, let me give you my thoughts. Which means nothing! Because the professionals have all the answers, even if they’re all different! You might have read in my past “Todays Message” how I feel about the price of oil. Common sense tells me oil selling for less than $30 or $25 per barrel is not a good thing. I believe and I try to trade accordingly, the market will follow the price of oil. Having said that, I also believe there is what I call “itchy trigger finger” trading. Could it be? There are more reports coming out every day; some good but mostly bad. This influx of news makes investors/traders very nervous. I think traders all over the world are sitting at their desk with their finger on the mouse. I’ve seen it where panic sets in and traders making quick decision trades, which stem from fear. Yes oil is a problem and the economy is not at it’s best, but we’ve all seen it worse. I’m hoping the market settles down and we’ll be on less of a rollercoaster. We’ve been in a bull market for a long time and a pullback can be expected but this up and down stuff is unnerving. I think it’s coming from fear which brings on itchy trigger finger trading. It’s very difficult to trade with the market up 300 and down 300, day to day. Being in the state of fear is not good while trading!
My trading has been cut substantially. I will be only trading Covered Calls on shares I already own until the market calms down a bit. Unless, of course I find something very interesting. lol. You’ll be the first to know!
Continue studying, it will pay off some day!
Steve
The Options Coach
Good sound advice for the current market uncertainty Coach. Now is not the time to follow the lead of all the talking heads out there. Think for yourself and keep some powder dry for when opportunity knocks again. This is a traders market and one must be universally informed in order to make a reasonable trade. Owning shares of solid companies and selling calls in a covered fashion takes a lot of risk out of trading and affords those in such a position to profit amidst the chaos. Chaos that I believe has been a long time coming. Meanwhile, now might be the time to invest in a little insurance to safeguard against dollar denominated losses and buy some silver. It feels like the real thing .
Steve,
Hope all is well. Love reading your thoughts and analysis of the market.
Best wishes,
Tom