Volatile Stock Market

Stock Market Volatility

Volatile Stock Market: Play The Trend 

Updated Octo 2022 

As stated in the last update, the Fed and its friends would do whatever it took to create the impression that shorting the market is a recipe for disaster. The idea, as we stated, was and is to force every Tom, Dick and Harry to embrace this bull. One only has to look at Monday’s action to see how far they are willing to go.

So, whatever rubbish they pump out in the news, this pullback will resolve itself sooner than later because the Fed and its allies will either create new policies to push more money into the markets or directly intervene by supporting the financial system. Market Update June 12, 2020

As detailed in a revised term sheet and updated FAQs, the SMCCF will purchase corporate bonds to create a corporate bond portfolio based on a broad, diversified market index of US corporate bonds. This index comprises all the bonds in the secondary market issued by US companies that satisfy the facility’s minimum rating, maximum maturity, and other criteria. This indexing approach will complement the facility’s current purchases of exchange-traded funds. https://bit.ly/2YFDMrC

The markets were pulling back nicely on Monday, and then the Fed came out and made that announcement and viola, they reversed course. They are not even letting the Dow test the 23K ranges; at the very least, by now, it should have tested the 21K ranges.

Don’t fight the Fed

The Fed is hellbent on making it so painful for the bears that they will either give up or sit on the sidelines waiting for the so-called perfect opportunity, which will never come. In the end, these bears will turn into bulls, which will mark the end of this bullish cycle, followed by a so-called crash, which will then mark the birth of the next baby bull.

The astute trader should embrace the current stock market volatility as it provides disciplined traders with mouth-watering entry points in top-rated companies. A volatile stock market is a trader’s dream come true. Volatility provides one with endless opportunities to milk the trend. Once you have determined the trend, you can use sharp pullbacks to open long positions and vice versa.

Hot Money To The Rescue 

US stock-index futures were higher Tuesday morning, aiming to add to the previous day’s rally amid reports that President Donald Trump is backing a $1 trillion infrastructure spending package to add more fiscal stimulus to help the economy recover from the coronavirus pandemic. https://yhoo.it/3d6sgdP

We stated that some infrastructure package would be released because the COVID pandemic has allowed the Fed and the government to create as much money as they want under the guise of trying to fix a problem they created. See the ingenuity here. Create a massive problem and then offer a solution while making the innocent pay for the tab. Look how many trillions of dollars they have created over the past seven weeks, and they will create even more if necessary.

Notice something else; many people are losing their jobs or will never get their jobs back. As we stated recently, the most expensive component in any firm is the human component. So, if you can get rid of high-paying jobs and continue to improve efficiency with better machines. The net effect is deflationary despite the inflation generated by creating so many dollars.

Remote Working Will end on a sour note.

They are pushing more and more people to work from home. Guess what happens next? If the job is also done by workers working from home, why must they be at home in the USA? See the next point; they will start talking about outsourcing these jobs or informing Americans that they have to work for less or from another country for less. And this will occur on a global basis.

Overall, the net benefactor from this action will be Asia, parts of Eastern Europe and limited portions of South America. We will expand on this more. So, while America will be an excellent place to invest and continue to prosper, most workers, regardless of their so-called high position, will not fare well. In the Era of AI, only the businessman and/or the self-employed have exceptional skills that will survive and thrive.

Now there are always exceptions, and one way to ensure you are invaluable is to keep ahead of the learning curve; in other words, you are very good at your job. If you have a good job, the second option is to slowly explore the concept of being an independent contractor; sometimes, the benefits can be quite immense if this strategy is implemented well.

As the money supply is going to keep increasing for the foreseeable future, we are reaching the point where it makes almost no sense to focus on stock market crashes. For in reality, it is only a stock market crash if you bought in at the top, but if one started opening long positions during the prior crash, it should not be viewed as a crash but as the next buying opportunity. Market Update June 12, 2020

Volatile Stock Market: Embrace Sharp Pullbacks

Monday’s action was confirmation that we needed to change tactics. We spoke of this in the last two updates, and we will transition into this new strategy starting with this update. Monday’s action also seems to confirm that from an opportunity perspective, it is a waste of time to focus on the crash aspect of any cycle. Every stock market crash leads to the birth of a new bull market.

This was the first large-scale manufactured crisis and the first time a bull was killed well before its time. And the crash was over before it even gained any traction. This action informs us that ensuing crashes which could be brutal in terms of intensity, will not last long and most of the bears will be caught with their pants down, as was the case with the coronavirus crash.

Once again, stock market volatility should not be feared, providing the astute player with many investment opportunities. Opportunity knocks when one least expects it; hence embrace it instead of slapping it on the face.

So today, we will target a few companies more aggressively than we have previously targeted them. However, as we stated, the gap between the 1st and 2nd entry points could be wide, so don’t let that get to you.

References

This article provides an in-depth guide to using market volatility to make profitable investments.

  1. “How to Use the Volatility of the Stock Market to Your Advantage” by Michael Deane, Forbes Link: https://www.forbes.com/sites/michaeldeane/2021/03/30/how-to-use-the-volatility-of-the-stock-market-to-your-advantage/

This article discusses how investors can take advantage of the stock market’s volatility to make profitable investments. It provides tips on how to stay informed about market trends, the importance of diversification, and the benefits of a long-term investment strategy.

  1. “7 Tips for Using Volatility to Your Advantage in the Stock Market” by Emily Bary, MarketWatch Link: https://www.marketwatch.com/story/7-tips-for-using-volatility-to-your-advantage-in-the-stock-market-2019-05-08

This article offers practical advice for investors looking to use the stock market’s volatility to their advantage. It discusses the importance of having a clear investment plan, diversification, and avoiding emotional reactions to market swings.

  1. “Using Stock Market Volatility to Your Advantage” by Anna-Louise Jackson, NerdWallet Link: https://www.nerdwallet.com/article/investing/using-stock-market-volatility-to-your-advantage

This article provides a comprehensive guide to using the stock market’s volatility to make profitable investments. It covers topics such as understanding market volatility, diversification strategies, and maintaining a long-term investment approach.

  1. “How to Use Market Volatility to Your Advantage” by Kyle Woodley, U.S. News & World Report Link: https://money.usnews.com/investing/investing-101/articles/how-to-use-market-volatility-to-your-advantage

This article discusses how investors can take advantage of market volatility to build wealth over the long term. It covers topics such as understanding risk, diversification, and staying disciplined during market turbulence.

  1. “Volatility: Using Market Fluctuations to Your Advantage” by Rob Williams, Charles Schwab Link: https://www.schwab.com/resource-center/insights/content/volatility-using-market-fluctuations-your-advantage

 

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