SP 500 for trader’s note
2022.12.16 07:20
The lengthy Wednesday’s post-Took care of selloff by crashing another 2.5% on Thursday.
Budrigannews.com – When it added 0.5%, the Fed did what everyone expected. Investors were alarmed by Powell’s rigid response to questions about how high interest rates will eventually rise and how long they will remain there. The friendly Uncle Jerome has long since passed away, and in his place is the tough Sergeant Powell.
However, given that the market’s bubbling relief over the past few months threatens to undo all of the Fed’s hard work by raising rates, this is not entirely unexpected. The Fed will be forced to raise interest rates even higher in order to break if investors return to the punchbowl too quickly. The market’s optimism must be controlled by the Fed, and the last two sessions did just that.
Even though I still consider myself to be a soft-landing optimist, I should never compromise my opinion. Prior to the Fed’s policy statement Tuesday night, I wrote the following:
Give the market a few minutes to process the news and be careful because the initial knee-jerk is often in the wrong direction, but after a handful of minutes, the market will no longer be able to hide its true intention and it will be a big move. Whether that is up or down is anyone’s guess, but as nimble traders, there is no need to guess. Follow the market’s lead and let the profits come to us.
Since the Fed’s announcement, we have lost more than 4 percent. My agnostic trading strategy was spot-on, but my optimistic tendencies were misplaced. Being wrong is unpleasant, but a sizable profit cushioned the blow to one’s ego. On the off chance that I can get this much cash-flow being incorrectly, here’s to trusting I’m off-base significantly on a more regular basis.
With respect to what comes straightaway, shorting stocks is one of the hardest ways of bringing in cash in light of the fact that the glimpses of daylight are so little, and the unavoidable skip comes rigid.
We can maintain our short positions from Wednesday if the market closes near the intraday lows on Thursday, but we must reduce our trailing stops. They should be even lower than our entry points by this time, making this trade very low-risk. However, we are not seeking low-risk; We need to keep a close eye on this because we want to make money.
Prices might rise on Friday, but it’s more likely that they will rise early next week. Prepare for the subsequent trade after locking in profits when they arrive.
Even though bears want stocks to return to their October lows, this will bounce long before then. Try not to get voracious, and make certain to secure in advantageous benefits. Keep in mind that we only earn money when we cash in winners.
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