Part 8: Trading Bullish AND Bearish Markets
Welcome back to the Rude Awakening, folks for February 17, 2021.
We are on day eight of your exclusive 10-part series talking about how to build a trading platform that gives us an edge… making more money, more consistently, with less risk.
We do this, of course, through asymmetric trading.
Today, part eight, we’ll dig into investing in BOTH bullish and bearish markets. Click here to read the transcript.
Make sure you’re keeping up with this series! I promise you will be thrilled to have this new skill in your trading tool chest.
To catch up will take you only 30 minutes. Just go through the videos linked below!
Here’s what we’ve covered so far…
Day one, we talked about the problem, which is we don’t have an edge or an advantage if we’re just simply buying stock or investing money directly into the marketplace.
Day two, we talked about the solution, which is building an asymmetric trading system, where we only risk a dollar for every $3 of potential profit.
Day three, we talked about how to use bracket orders to automate that process.
Day four, we talked about filtering and screening through the 14,000 different opportunities we have in the marketplace every day, how to find those trades out there.
Day five, we talked about how to calculate probability of profit and win-loss ratios and really understand whether or not we do have an edge or an advantage when we go out and place a trade.
Day six, we talked about synthetic covered calls and how that works in our portfolio and what it does for us.
Yesterday, day seven, we discussed managing the portfolio.
Now, continue reading for a brief look at today’s markets…
“Stocks open lower even after retail sales surge past expectations”
And once again, the pendulum swings back to a low morning. This is exactly why the smart trader’s portfolio has upside and downside profit potential, which you’ll learn about today.
Yahoo Finance reports…
Stocks fell Wednesday to retreat from record highs, even after new data showed retail sales surged at the fastest clip since June at the start of the year.
Retail sales surged at a 5.3% monthly rate in January, coming in well above the rise of 1.1% consensus economists had expected, and ending a three-month streak of declining monthly sales.
“The 5.3% month-over-month surge in retail sales in January completely smashed our own and the consensus expectation of a more modest 1% gain and highlights how quickly reopenings and the $600 stimulus checks have translated into stronger spending,” Michael Pearce, Capital Economics senior economist, said in a note. “That said, with the stimulus checks spent more quickly that we had expected, we expect retail sales to fall back in February.”
A day earlier, the Dow set a fresh record closing high while the S&P 500 and Nasdaq touched and then retreated from record intraday levels. Shares of Chevron (CVX), E.W. Scripps & Co. (SSP) and Verizon (VZ), the parent company of Yahoo Finance, jumped after Warren Buffett’s Berkshire Hathaway disclosed new stakes in each of the companies. Bitcoin prices (BTC-USD) rocketed above $51,000, after breaking above $50,000 for the first time ever on Tuesday.
Markets over the past month have priced in the likelihood that additional, significant fiscal stimulus will help propel the economic recovery and work alongside ongoing monetary stimulus from the Federal Reserve. The yield on the benchmark 10-year Treasury note hit a one-year high of about 1.31% on Tuesday, amid hopes of a firming economy.
West Texas intermediate crude oil prices (CL=F) added to gains after settling above $60 per barrel for the first time since January 2020 on Tuesday, as new supply concerns compounded with optimism over a post-pandemic resurgence in demand for travel and fuel. Domestic oil output has slumped by nearly one-third due to freezing temperatures in Texas, Bloomberg reported on Tuesday.
Despite a slightly down day, we are still in an extremely bullish market.
However, what goes up must come down.
Today, you’ll find out how to make profits in a down market.
Keep following along with this series if you want to learn exactly how to do this…
Have a great rest of your trading day.
We’ll talk tomorrow!
Editor, Rude Awakening