There’s been a lot of uneasiness in our trading room lately — from traders who have been at this for years to our new trial members that feel ‘in over their head’. It’s an unpredictable time in the market…
And I feel like I’ve been using the word ‘unpredictable’ so much, someone should write it on my trader’s tombstone. But it’s true. Historically, this much volatility is abnormal.
As a result of this abnormality, the market has been full of emotion, fake outs, and weak rallies followed by sellers coming in force. Each gap up overnight has quickly been sold, telling me that longs are quickly taking profits and bulls are far and few between.
But, I’ll tell you what this means for us as traders…
The typical swing mentality has been rough, quite frankly, as we’ve been faced with extreme volatility. What goes up 2% on Monday goes down 3% on Tuesday, then back up again on Wednesday. This type of market movement can be stressful for new traders. Thankfully, I’ve got a strong grip on my ‘trade monster’ and am well equipped.
This is especially true if you’re trading any news driven market, such as Chinese internet stocks, industrials, transportation stocks, etc, that are affected by tariff wars — or at least perceived to be affected by tariff wars.
For me, I’m sticking with a couple more aggressive, relative strength names in tech — my poster child, MSFT and CSCO, and then focusing on sectors with strength. Right now, those sectors are healthcare, consumer staples, and utilities.
I’ll love the healthcare sector till the cows come home). I’ve made plenty of bids for why I think healthcare is viable, like in this post HERE.
But, why is consumer staples a good sector to buy?
Check out my video on XLP – the Consumer Staples sector, Coca Cola (KO), Pepsi (PEP), and Protor and Gamble (PG) for the answer.
I’m looking to buy these in both long-term growth accounts and options in those with daily squeezes.
Wrapping up, it’s been a long day for me, as I’m still covering for Carolyn, the Fibonacci Queen, while she enjoys her cruise. Tomorrow, I’m going to wake up and trade, fill in for Carolyn’s trading room session, and then head to the tv studio in downtown Seattle to film Boom Bust.
When the producers send me my topics in the morning, after that, it’ll be all about prepping for my segment. So, look for another blog and tv segment, coming up soon! You can sign up for them automatically by commenting on this post.