Market Report Confusion, Complacency

Todd Horwitz Chief Strategist BubbaTrading.com

Be Prepared not Surprised.

Last week the markets looked ready to collapse and reverse trend. Monday saw huge follow through to the downside. However, the rest of the week saw a rally as markets closed higher on the week. Volume and volatility collapsed through the week.

The action brings the question, is the bull market over? The answer is nobody knows. There are many disturbing factors that show indications that the end is near. Lumber and Copper prices melting down, employment weak with stimulus.

There is never a bell or warning when the next bear market will start but we must pay attention to the warning signs. Markets are on edge as is the country. Inflation is soaring, interest rates are starting to climb and those with stimulus don’t want jobs which equals stagflation.

The option market is starting to show signs as well but call buying remains on top. However, the next four are bearish strategies which include Put buying and call selling. Remember the strategies alone don’t tell the entire story because we don’t know the other side of the trade.

The bull side is being dominated by TSLA, XLE, NVDA, SPX and APPL while the bear side is led by NRXP, WYNN, SPY, AMD and CHWY. This is a mixed bag at best.

Remember, we can’t predict what’s next, but the price action will give indications and guide us in the right direction. All signs are starting to point lower however flexibility is the key to trading successfully.

As traders and investors, we have one thing to remember, follow the trend of the market. Be patient disciplined and leave your emotions out. The most important thing to remember is money management and self-control. 

Todd “Bubba” Horwitz

BubbaTrading.com

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