Facts Will Make You Money, Not Headlines

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FOCUS ON FACTS, NOT HEADLINES:

The US stock market is (very) strong. Remember, it is very easy to get caught up in the latest headline(S) and lose track of what matters most: price action. Until I see any signs of serious distribution (heavy institutional selling) the market deserves the bullish benefit of the doubt.

Results Are Results. Period.

The S&P 500 is a fraction of a percent below its record high (hit two weeks ago on March 7). Ditto for most of the other averages (or below multi-yr highs). I have been asking for years- what does the market need to do to prove itself to the bears? Everytime this market pulls back a few percentage points- I can’t tell you how fearful people get. My inbox fills up with fear-based questions: Are we going to crash? Is this the top? etc..etc.. The why doesn’t matter as much as the what. (There are many “whys”- most people “remember” two severe bear markets since 2000, they do not trust the central bank driven rally, have a hard time looking past the latest headlines, are fear based traders, etc..etc.).The what, is that they are making fear-based decisions, get shaken out too quickly, and end up missing big rallies.  

Market Is Speaking. Are You Listening?

Contrary to most people, I am not glued to my screen all day and do not read every headline that crosses the wire. Instead, I prefer to only read one headline: The market. I do my best work in the weekly time-frame so all my decisions are made when markets are closed, typically on nights and weekends. This process allows me to remove my emotions from the decision making process, create a plan for the week and then let the market guide me (in and/or out). I do my best to drown out all that noise and focus on the tape, whenever possible. I like to say that the market is speaking. Are you listening? For me, it is tough to listen to the 24/7 daily news and the market at the same time. One tends to win (typically the news b/c it is non-stop and real people are speaking). The market is very quiet and doesn’t say a word. My job is to listen,interpret what I see happening, and adjust my positions when the facts change.

Facts Matter, Headlines Don’t:

Don’t let the latest headlines scare you. It is very easy to get caught up in the fear or headline Du jour. Avoid the temptation. Yesterday, I wrote about how Facts Matter, Not Headlines – here. Think about all the negative headlines the market has digested over the past 5 years. Natural Disasters, Nuclear Meltdowns (Fukushima), European double dip recession, Greek Debt Fiasco, Russia/Ukraine, Arab Spring, Fiscal Cliff, Tepid US Economic Recovery (new normal), etc.etc.. Meanwhile, the S&P 500 is up over 180% in the past 5 years and it has not experienced a pullback greater than 10% in almost two years! That said, what is more important the facts or the latest headline?

My Job: Provide you with intelligent ideas in the market

My job is to provide you with intelligent ideas in the market. I accomplish this goal by trading on what I see happening, not what I think will happen. Until the facts change, this is a very strong bull market and pullbacks should be bought, not sold. I hope this information is helps you. 

 

Monthly Chart of the S&P 500 From the March 2009 Bottom- March 2014

SPX- Monthly

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