Trade War Strikes Again

In yesterday’s blog and video, I made mention of the fact that nothing had changed in the so-called trade war and to be careful as we approached price resistance in the index charts.  Obviously, price action is not predictive of political speed bumps, but it did let us know prices were a bit overextended in the short-term.  I also mentioned yesterday the powerful emotion created by the “fear of missing out.”

We see the index ripping higher, and traders get that ugly feeling that you’re missing everything.  Even though the rally is well underway our vision becomes clouded by this strong emotion causing to chaise, and buy at or near price resistance.  Unfortunately, this bad habit is often quickly punished as the stock or the index pulls back, and you have to watch your capital disappear.  It’s a tough lesson to learn, and I hate to think about all the money I lost over the years as the market beat this lesson into my thick head.  A rule that has served me well is to sell stocks at or near price resistance, don’t buy at or near resistance.

Due to loss of power I will have to cut this short the blog short this morning as I’m running our of time.

Trade Wisely,

Doug