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How to play the game

Blog - How to play the game

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A Beautiful Market - Sometimes

A Beautiful Market (Sometimes)

We all know by now, the Market can be the most beautiful place in the world, but sometimes we can also be pulling our own teeth out in frustration, because we can’t see things coming… or can we?

Wednesday and Thursday this week were a bit of a wake up call to many of you who taken buy positions in the market and also reminded everyone that the stock market doesn’t keep going up forever… I think if we cast our minds back to October of last year, most of us know we can get hurt quite badly and it’s not always plain sailing.

We all need to understand that it only takes the Wall Street goblins to switch off the fairy lights, and it has everyone rushing for the exits at a speed Usain Bolt would be proud of, so let me ask you a question.

How many of you had the understanding that Wednesday and Thursday were possible?

I’m not talking about those of you that “felt” the stock market was due to drop a little, or to those of you that watch CNBC and Bloomberg listening to all the nonsense of the day…

To rephrase the question above a little more appropriately…

How many of you have the Technical Understanding to know that when the drop started this week, you recognized what was happening technically? How many of you had a plan in place to react BEFORE the event?

I find a question to ask that helps me daily, is to ask myself - What if I’m wrong? it serves me pretty well, and I know you all follow my work for my insight and charting skills, but what if I’m wrong.. I mean, what if I actually get it wrong, and you all followed my charting to the letter. how would you feel about following me blindly?

I know there are hundreds on this very email list that pay for subscriptions and trading “signal” services, I know there are many of you learning from YouTube and maybe some of you trying to reverse engineer my work - which is completely fine - I don’t grudge it at all, I just hope you make profit

I understand there’s a few people out there that like to help a lot (like I do), but how many of them actually show you how to read the overall market and how to identify strength in the Market?

How many of them actually equip you to stand on your own 2 feet and to build your own Technical Analysis insight?

Exhibit A - SPY

SPDR S&P 500 2nd May 2019.png

On Tuesday I sent out my Half Time report to my client community with the message - I’m bullish, I’m not seeing any real weakness at the moment, there’s nothing to give me cause for concern, but come Wednesday - the FED opened their mouths.

SPY looked to have a little wobble at key support / resistance - therefore caution was needed to the possibility of a failed break out - which we got - today was a good day (Friday 3rd May) - however we are still below this key market level, and stalling - therefore there’s most definitely a case to be made for a bit of caution despite the up side today.

The other thing to probably say is this - I don’t care what the FED say, I honestly don’t care about the interpretation of their words or what the CNBC analysts scare monger’s say because I only care about what price tells me, because this really does stop me 2nd guessing every single little detail that can cloud my decision making for days on end, the less information your mind has to process, the easier it is to execute effective decisions (in my opinion)

If you’re out there reading this, and you like to fill your head with the media nonsense, I’d highly encourage you to switch off the news and just pay attention to price - because it makes things MUCH easier - not more difficult.

Although I fully understand the FED was the catalyst for the move to the down side, it’s price that tells me there are warning signs… in the same way I was able to competently navigate the Market from September last year… I only paid attention to price - and this serves me well.

Exhibit B - The Dow

Dow 3rd May 2019.png

So let me give me my take, and the “price” view.

The Dow met resistance - therefore the market dropped - fully predictable - and was always a note of “caution”

SPY looked to have a little wobble at key support / resistance - therefore caution was needed to the possibility of a failed break out - which we got - today was a good day (Friday 3rd May) - however we are still below this key market level, and stalling - therefore there’s most definitely a case to be made for a bit of caution despite the up side today. Next week will be rather important.

Various sectors / ETF’s and charts also help me to arrive at a bullish thesis or sometimes a short term bearish thesis - it really does depend, and whilst I don’t get it right 100% of the time (I don’t think anyone does) - There’s a VERY clear audit trail of my thinking dating back to January last year (go check my blogs) where this caution helped me enormously to avoid the car crashes in February / April and October last year - so I think I’m fairly well qualified to talk about Market Conditions.

By having an understanding of the overall market, we can most definitely understand when to get out and wait for a better environment (something I’m sure most of you wished you understood last year) - because getting defensive never did anyone any harm, and if you get defensive too early… what’s the down side? You collect profits and then buy back in again?

Am I overly cautious sometimes? Absolutely

Does it harm me in any way to be cautious? Absolutely not

Finding entries into a market are insanely easy for me and my client community… not just in an up trending market, but also a down trending market, you can see below just how my charts have performed this year.

How many of you know when to get defensive, and how many of you know when to get aggressive to the up side by picking only the BEST stocks whilst identifying High Growth Stocks?

I guess my group has many advantages, whether it’s having individuals based in Silicon Valley, getting the “word on the street” on tech Stocks to be part of, or whether it’s picking up Options tips from individuals that’ve turned modest sums into incredible sums - it’s not just me any more - my community is the place you want to be, because success breeds success - that’s just the way it is.
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Performance 3rd May 2019.jpg
Sam McCallumComment