On one hand we have the U.S. GDP growing at its fastest rate in five years… upbeat factory data… a jump in consumer spending… and strong earnings reports from dozens of major players such as Pfizer, UPS, Archer Daniel Midlands, Cummins, and Alcoa.
On the other we’re facing soaring food, fuel, and commodity prices worldwide… a looming collapse of Portuguese and Spanish debt… a downgrade of Japan… protests in Egypt… and, some say, extreme over-confidence in U.S. stock markets – all of which hint at a MAJOR correction…
What does it all mean – are the markets poised to pick up a fresh leg of steam as the recovery continues… or are we on the verge of a painful, new downturn? As far as I’m concerned……neither possibility should play a part in deciding which trades you choose to make in the present moment.
I’ve said it before and I’ll say it again: Betting money on a future outcome is gambling, not trading.
Successful traders understand that trying to guess the future is a fool’s errand… they know the real key to keeping your profits flowing is to trade with the trend, not trying to predict it.
So, what should you do in response to the growing extremes of fervor and nervousness in the market… what impact should it have on your trades? Only two:
- Make sure you have your preferred type of protective measures in place – stops, hedges, exit plans, etc.
- Keep a close eye on the Trade Triangles as well your email inbox (for any email auto alerts you have set up in your MarketClub account) – taking appropriate action when and only when your indicators or alerts give you the signal
Of course, while it isn’t wise to let the possible future outcome of events dictate how you trade today, it is wise to talk about what’s happening and where it might lead us...
Discussing what might happen with others can reveal possibilities you may have overlooked – and allow you to watch for future trade opportunities you would otherwise have missed.
So, what do you think – are we reaching a turning point in the market? What impact do you think today’s events will have on the markets in the months ahead? What potential trades are you keeping an eye open for because of them?
I’d really like to hear what you have to say…
All the best to you,
President of INO.com
Co-founder of MarketClub