Weekly Update: It’s Not Pretty…
Good evening, and welcome to this week’s edition of Stealth Trades!
I like to think of myself as an optimist.
I do my best to weed through the muck and find opportunities in the stock market instead of harping on what’s going down.
But, at the same time, I have to admit when conditions are poor.
And right now, they are.
I have not sold any of my long-term holdings. I am just as bullish on gold, silver metals and the equity market over the next 2-5 years as I was before.
But for shorter-term swing trades, not much is working right now.
The S&P 500 index, which was fighting to hold onto the 200-day moving average, has thrown in the towel.
Stocks in the Nasdaq Composite have, as a whole, made more new lows than highs for the last 8 straight trading sessions.
Not by an alarming number, but still not a great sign.
The percentage of stocks beneath their 200-day simple moving average has fallen below 50% for the first time since July.
And outside of the energy sector, nothing looks promising at the moment.
This is not to say the market is crashing. The odds we will see a nasty bull market are still very low – there is no fundamental case for that any time soon.
But if you do this long enough, you’ll learn there are periods when conditions are ideal and you want to step on the gas… and periods where conditions are poor and it is best to dial back.
Right now, it is the latter.
But in this news-driven environment, things move fast.
President Trump made a Truth Social post Monday morning at 6am citing “very good and productive conversations” with Iran.
That was all it took…
The entire index surged 3.6% in 5 minutes.
And, when a real resolution is eventually reached, we could see a move several times this large.
But until then, my advice is to trade light or not at all. Focus on the areas holding up the best in this weakness.
Because, in all likelihood, those are the areas that will move the fastest when conditions improve.
Best wishes for your trading,
