Hey friend,
Just as Head Trader Ross Givens predicted, the choppy price action around Fed Day continues.
Let’s see how the market has been moving.
The Daily Direction
Note: Indexes closed lower yesterday, sending the short-term direction for the Russell 2000 downwards.
The Daily Nugget
Stop using short-term moves as confirmation.
So many traders – way too many – use short-term moves for confirmation.
They keep looking at daily candlesticks and using it to confirm their pre-existing bias.
If they’re bullish, and the stock or market moves up for a day – they take it as “proof” they were right.
If they’re bearish, and the stock or market pulls back for a day – they also take it as “proof” they were right.
Now, don’t get us wrong…
There is a LOT you can tell from daily moves, if you know what you’re looking for.
But the most important thing in the market is TREND…
And trends aren’t made or broken by single-day moves.
The market may be chopping around and pulling back this week – despite the Fed cutting.
But if you look at the trend the market has been on since the April lows…
You will quickly realize that using these short-term moves as confirmation that we’ve reached a top is foolish.
So, like we’ve said previously…
Before you start worrying – zoom out and look at the broader trend.
It will save you a lot of unnecessary anxiety…
While also preventing you from making silly moves.
Have a good weekend.
The Traders Agency Team
