The major indexes put in new highs last week, again. That is the current reality, the market is going up. But will it continue? Or will there be some catalyzing news or event that will bring it down? In the current reality, we may be only 140 characters away from finding out.
I’m talking, of course, about the Presidents’ twitter feed. Regardless of what individuals think about the President and his communications, the market has found them to be positive. That is a reality. It can be argued that the assurances of tax cuts, jobs, etc. justify a rising market. It can also be argued just as persuasively that the absence of actual legislation or lasting policies make the markets’ move up pre-mature or currently unjustified.
The absence of actual legislation or lasting policy changes means that the current market gains are based purely on speculation and emotion, not on a change in market fundamentals. Given that reality, the speculation and emotion can change very quickly—for the positive or the negative. That is why I say we are “140 characters away from . . . what?”
In the current reality, it is more important than ever to trade carefully. We could choose to sit the market out, but that isn’t really a strategy, it is fear. And fear could keep us from ever trading, any market. If we are going to be traders, then we need to trade the markets, regardless of uncertainty. We need to have a strategy and a set of rules that does two things;
1. Removes emotion from our trading decisions
2. Limits risk
For number one, I very carefully said that emotion is removed from our trading decisions. Of course, we are going to experience emotions about the market and our trades, that is normal and unavoidable. But we can take emotions out of our decisions. That is the key.
And, recognizing that some trades are going to fail and being prepared for that and controlling the amount that is lost is paramount. Keeping the winners big and the losers small is the foundational to consistent profitability. Period.
FollowMeTrades has these elements in our trading system and because of that, we have been consistently profitable for years now. And this year is no different. We are currently taking trades, both long and short, with confidence and we are in solid profit already this year. And we expect that to continue, regardless of the market direction.
What will the next 140 characters bring to the market? I have no idea. What will they do to our trades? Some big winners and a few small losers! No problem, tweet away sir . . .
Gold continues to build on the rally that we identified last year. We are still in Gold and the current trend up still looks good.
Oil is stuck in a sideways channel and is giving no clues about the near-term future. It is untradeable at this time. As I have been saying for several weeks, the key level is ~$56.27 on the Crude Oil futures price. If it breaks above that level with some momentum, we might just see a nice rally beginning. But, it has not done that yet, so we wait and watch.
That’s it for this week. Stay tuned for continued updates and I will continue to provide my best possible insights.
Follow Me Trades LLC
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