Is the stock market going to crash?!?!
I reckon about 50 people a week ask me this question!
The reality is that we have never experienced this kind of crash before, we have never fought COVID before and we are seeing a huge amount of stimulus from our governments.
Even the most experienced traders and investors are struggling to predict the market.
Here is what I know:
• It's a crazy time, with things changing daily
• The market has recovered well since the crash, but it's not yet "technically safe"
• We are going through a digital evolution, meaning that things are different. Business is different. Life is different.
• Companies are announcing loss in sales and increase in profits at the same time. Profit is what matters.
• We are never going to see "work" in the same way again.
• There is a huge amount of misinformation in the media
• There is an even bigger amount of misinformation coming from the public (the new media - how ironic)
• The stock market responds to supply and demand. You might think a stock is overpriced (and it may be), but if another person is willing to pay that price, is it 'overpriced', or just... 'priced'?
• A company is not it's stock price. Read this 3 times.
• An index is not a company. Read this 3 times.
The world is changing and evolving.
Here is my suggestion to investors and traders:
Don't try to predict. Instead get really good at adapting and even better at reacting. Use technology to your benefit. Computers are better than us at processing things, we are better at strategy. Manage your risk every second of every day. Never stop doing what you love in he trading and investing world, instead, proceed with caution and have an exit strategy.
Technicals:
The below chart is how I personally see the ASX right now. We are looking very bullish technically, with a huge ascending triangle on top of a trip wire on the daily. We also have an ascending triangle on the 4hr.
We are pressing against resistance right now. A push through could see us making new recent highs and moving up a couple of hundred points. If we do, be careful as we are going to hit a major supply zone, which could trigger a reversal. A push through this second level of resistance could see the market heading in a longer term positive direction. Marked on chart.
Another thing to note, we are right on the 61.8 Fibs, a prime position for a reversal to occur.
Does this mean the market is going up? No it doesn't, but it looks like it wants to.
The market is a flaky, fickle, 2-faced, sadistic creature. Remember what you are dealing with.
Be careful, its not your friend and it doesn't care about you.
Does this make you feel bad? Why? Now you know what you are dealing with, you can milk it for everything it's worth.
Your role as a trader is to take money from the market and put it in your pocket. Don't kid yourself, this was never a friendship.
How I read it:
It could easily go either way right now. Risk management is key. Invest in sectors that stand to benefit whether the crash happens or not.
Read the following aloud to yourself:
• Risk management is my number 1 priority
• I'm going to do my own research and make my own choices
• My friends and family aren't qualified to give me financial advice
If you prioritise risk, you minimise loss. Its really that simple.
Here's the thing, we just don't know what will happen. No one does. All the time you spend searching for someone to give you that answer could have been spent finding your next major trade. Spend it wisely.
A couple of things to be aware of:
- Australia follows the US. Elections are coming soon in November.
- Jobkeeper is allowing companies to keep operating, it's potentially ending next March.
- All business is changing. What you know today may not apply tomorrow.
With that being said, I wish everyone an amazing week trading and investing!
• Learn
• Manage Risk
• Adapt
• Remove the ego
• DYOR
• Invest in what you know
• Go your own way
Have a great week 🚀
I reckon about 50 people a week ask me this question!
The reality is that we have never experienced this kind of crash before, we have never fought COVID before and we are seeing a huge amount of stimulus from our governments.
Even the most experienced traders and investors are struggling to predict the market.
Here is what I know:
• It's a crazy time, with things changing daily
• The market has recovered well since the crash, but it's not yet "technically safe"
• We are going through a digital evolution, meaning that things are different. Business is different. Life is different.
• Companies are announcing loss in sales and increase in profits at the same time. Profit is what matters.
• We are never going to see "work" in the same way again.
• There is a huge amount of misinformation in the media
• There is an even bigger amount of misinformation coming from the public (the new media - how ironic)
• The stock market responds to supply and demand. You might think a stock is overpriced (and it may be), but if another person is willing to pay that price, is it 'overpriced', or just... 'priced'?
• A company is not it's stock price. Read this 3 times.
• An index is not a company. Read this 3 times.
The world is changing and evolving.
Here is my suggestion to investors and traders:
Don't try to predict. Instead get really good at adapting and even better at reacting. Use technology to your benefit. Computers are better than us at processing things, we are better at strategy. Manage your risk every second of every day. Never stop doing what you love in he trading and investing world, instead, proceed with caution and have an exit strategy.
Technicals:
The below chart is how I personally see the ASX right now. We are looking very bullish technically, with a huge ascending triangle on top of a trip wire on the daily. We also have an ascending triangle on the 4hr.
We are pressing against resistance right now. A push through could see us making new recent highs and moving up a couple of hundred points. If we do, be careful as we are going to hit a major supply zone, which could trigger a reversal. A push through this second level of resistance could see the market heading in a longer term positive direction. Marked on chart.
Another thing to note, we are right on the 61.8 Fibs, a prime position for a reversal to occur.
Does this mean the market is going up? No it doesn't, but it looks like it wants to.
The market is a flaky, fickle, 2-faced, sadistic creature. Remember what you are dealing with.
Be careful, its not your friend and it doesn't care about you.
Does this make you feel bad? Why? Now you know what you are dealing with, you can milk it for everything it's worth.
Your role as a trader is to take money from the market and put it in your pocket. Don't kid yourself, this was never a friendship.
How I read it:
It could easily go either way right now. Risk management is key. Invest in sectors that stand to benefit whether the crash happens or not.
Read the following aloud to yourself:
• Risk management is my number 1 priority
• I'm going to do my own research and make my own choices
• My friends and family aren't qualified to give me financial advice
If you prioritise risk, you minimise loss. Its really that simple.
Here's the thing, we just don't know what will happen. No one does. All the time you spend searching for someone to give you that answer could have been spent finding your next major trade. Spend it wisely.
A couple of things to be aware of:
- Australia follows the US. Elections are coming soon in November.
- Jobkeeper is allowing companies to keep operating, it's potentially ending next March.
- All business is changing. What you know today may not apply tomorrow.
With that being said, I wish everyone an amazing week trading and investing!
• Learn
• Manage Risk
• Adapt
• Remove the ego
• DYOR
• Invest in what you know
• Go your own way
Have a great week 🚀