Mid April Market Recap Analysis Report 4-20-18...We Get Paid To Wait
One of the hardest things to do as traders is to be patience, not overtrade and not trade because we feel we have to in order to make money. However, in essence we as traders get paid to wait. The 1st quarter of this year has been great to me because the Market's direction was up....the volatility helped me as well. But this isn't about me, it's about telling you we are in a different environment now and we must adapt and/or be patience until the Markets tell us what direction it wants to go. With that said, I want to summarize several posts over the last 4-5 weeks that validates why we need to wait in order to get paid.
We are still in a long term monthly uptrend (yellow line), despite the recent volatility the bull market is still intact. The intermediate term, we are trending down on a weekly basis (red line), but we are trending higher in the short term (daily aqua line). Conclusion, the S&P 500 is range bound.
The S&P 500, which is based on the market capitalization of the 500 largest stocks listed on the NYSE and NASDAQ including FANG stocks, is considered the best representation of the U.S. market. Within the S&P 500 index, FB, AMZN, NFLX, and GOOG, are ranked 6th, 3rd, 40th, and 9th, respectively.
These 4 stocks will determine what direction the Markets head next. They also announce earnings next week:
FB: Apr 25, 2018
AMZN: Apr 26, 2018
Netflix posts monster earnings report as revenue surges by 43% earlier this week.
GOOG: Apr 23, 2018
Yesterday the Markets went down for the 1st time in 4 days because the yield on the 10 yr bond went up to 2.91%, which is back at the highs for 2018. The low going back to the beginning of 2017 is 2.04%.
Yields are inverse correlated to interest rates. Why is this significant...because there is a tipping point between interest rates and the Markets. This chart should say it all.
The trend is your friend, until the very end, but the Markets at range bound now, so don't fiddle in the middle, otherwise your account might be a bit little and get paid to wait because it's fashionable to arrive to the Party late.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Hey, just wanted to let you know I gave you an upvote because I appreciate your content! =D See you around
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