With stocks continuing to move lower, I wanted to post a quick update on what I’m seeing in the market right now and our strategy for what to do next.
We’re at a very critical level in the market right now, with the S&P 500 trading below 1,950. Should that support be significantly violated, it could be a sign that the market is ready to make a big move lower. The 2-year Treasury – a key indicator of the Street’s sentiment –remains unchanged at 0.57%. A rise in that level would show that investors have lost confidence in Federal Reserve Chair Janet Yellen and add further downside momentum.
There are two catalysts ahead tomorrow that could reverse this trend: the employment report and the start of a new month, which tends to have a bullish bias. If the jobs news is positive, the S&P 500 could regain footing and remove some of the risk that’s in the market right now.
Given the uncertainty going into tomorrow, I believe that our best move here is to be patient and see what the market does next. That may mean stepping aside for today and waiting for the market to find a definitive direction before entering a new trade. While we’ve been three for three in our last new trades in a market where many investors are getting whipsawed, I want to make sure our next trade is the right one. Of course, if I find a trade that I want us to jump on right away, I will be in touch with a Flash Alert.
Trading Strategy Update
With stocks continuing to move lower, I wanted to post a quick update on what I’m seeing in the market right now and our strategy for what to do next.
We’re at a very critical level in the market right now, with the S&P 500 trading below 1,950. Should that support be significantly violated, it could be a sign that the market is ready to make a big move lower. The 2-year Treasury – a key indicator of the Street’s sentiment –remains unchanged at 0.57%. A rise in that level would show that investors have lost confidence in Federal Reserve Chair Janet Yellen and add further downside momentum.
There are two catalysts ahead tomorrow that could reverse this trend: the employment report and the start of a new month, which tends to have a bullish bias. If the jobs news is positive, the S&P 500 could regain footing and remove some of the risk that’s in the market right now.
Given the uncertainty going into tomorrow, I believe that our best move here is to be patient and see what the market does next. That may mean stepping aside for today and waiting for the market to find a definitive direction before entering a new trade. While we’ve been three for three in our last new trades in a market where many investors are getting whipsawed, I want to make sure our next trade is the right one. Of course, if I find a trade that I want us to jump on right away, I will be in touch with a Flash Alert.