After the prior week’s new lows, buyers did re-enter the stock market for bargains, causing prices to rise modestly all days until Friday. Once again, the Friday employment report ruined a good week.
The report showed strong labor demand in September, contradicting the growing number of corporate hiring freeze/layoff announcements. This of course created panic among retail investors – again – who took this to mean more Fed rate hikes are likely, which will – again – prolong the recession.
Despite the Friday sell-off, for the week there was more upward price bias than down among our entire watchlist of stocks – though most of our positions were little changed after all was said and done, and very few trade signals.
A reminder to newer subscribers – the high level of uncertainty/lack of investor consensus we are seeing now (especially the divergence between retail vs. institutional investors) driven largely by an inept and outright anti-business federal administration does severely diminish the number of trade opportunities that would otherwise routinely occur for stock traders. Saw the same situation under Obama – stock prices stagnated for prolonged periods resulting in an unusually low number of trade signals.
Patience is key – there is nothing to be gained from forcing trades that aren’t there. Some of the largest profits are often earned in long trades entered just as an extended, pessimistic downtrend ends, which could happen soon, as it did in April 2020 during COVID fears. Perhaps the mid-term election outcome will prove to be the next such catalyst? New or long-time subscriber, we bide our time.
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