Well, the Trump/China market “tickle”, as I referred to it at the weekend, has become a mighty gouging scratch as the trade war rhetoric escalates.
This has been great for my volatility plays and short plays, but recent longs – aside from Gold – have stopped out either with lower profits, scratch trades or a small contained, controlled loss.
Apply my rules and my trading plans PROPERLY, and the impact of news is dramatically reduced, leaving you fit to fight another day.
Ignore my rules and these kinds of dramas can be catastrophic.
So, what to do?
Well, if you’re focusing on post-earnings bullish breakouts, which wasn’t unreasonable as an outlook, you’re set fine as there’s very little damage done with so few breakouts actually materialising, and of course subject to the correct trading plan implementation.
For now we have to let the market repair itself, so I’m now focusing on an imminent reversal possibility and how close good stocks are getting to their 200-day moving averages. Yesterday the Russell 2000 smashed through it and the Dow touched it, as did the behemoth AMZN.
My instinct is that many good quality stocks will rebound from these oversold levels. I’ve been uber-cautious with pre-earnings this season, and I’m mighty glad of that, playing only confirmed breakouts which were scant in any case.
On the plus side, we are still in earnings season and there will still be good setups for us over the coming weeks.
Remember, it’s all about sticking with the plan.
See you on the weekend.