A Pebble Can Initiate an Avalanche…
Good morning folks, and welcome to the Rude Awakening!
Friday is a great time to do a review of everything we’ve seen throughout this trading week.
Let’s start with last night’s big news…
Trump Tweets: “@FLOTUS and I tested positive for COVID-19.”
At 1:40 AM ET, Trump shared this tweet. And within 20 minutes the futures went into a landslide selloff.
I myself started buying into some puts on the news!
But the futures did try to recover a bit, rather quickly, within just a few hours, and they’ve been climbing more from the initial low point of last night.
This morning, however, they’re falling again.
I would definitely anticipate a weak day today…
Looking at the Big Picture
After fighting so hard this week to push up above it, we are now once again below the 50day MA.
Our stochastics and RSI are also giving us sell signals now.
There’s a saying from Sun Tzu, the Chinese military strategist and philosopher. It goes — and I’m paraphrasing — a pebble can initiate can initiate an avalanche, but it is not responsible for it.
This idea applies to us today because, if the market is ready to collapse or see a major fall, one small catalyst is all it takes to put that event into action.
But, if the market is strong, one small event, like Trump’s situation, is not going to cause major, big picture effects.
So, to figure out whether or not this pebble WILL cause an avalanche, let’s look at our recent history…
Whatever Happens Today, Don’t Panic Yet
The key is this: it’s not long ago we were at all-time highs. It was in the early days of September.
We have non-farm payroll numbers coming out today, and they look good.
Unemployment is down.
The economy is recovering.
We are in what appears to be a V-shaped recovery in the markets.
All this to say, signs indicate the economy is continuing to recover and hold that recovery, month after month.
I do not know whether or not Trump’s contraction of Covid-19 is enough to tumble us all the way back down the hill.
I do believe we’ll have some ugly days, but we’ll again see strength coming back into the marketplace.
It will definitely be interesting to see how today goes.
But, whether we bounce back or continue to fall, it’s all the same for us traders. Either way, it presents us some amazing opportunities…
We have had an AWESOME trading week, though, despite volatility and all the uncertainty.
So far, in total, we have seen 10 winners in this beta test, out of 11 trade ideas. We’re clocking a win rate of 91%! And that’s just in 3 weeks…
The Rude Awakening Pro beta test is off to a phenomenal start.
If you’d like to join this service for free, and for life, just click here to sign up. There aren’t many spots left.
That’s it for this week.
We’ll talk again Monday.
Editor, Rude Awakening