Well we could be forgiven for thinking that there was a financial miracle this week – here is what happened:
- Bond yields fell
- Every major stock market globally rallied
- The US Dollar lost strength against other major currencies
- Cryptocurrencies rallied
- Many major agricultural commodities fell
- Energy prices fell (Oil and Natural Gas)
Not sure if someone waved a magic wand and miraculously fixed the world economy, but this is very much a ‘risk on’ situation.
Huge turnaround from last week.
But is it going to last, that is the real question!
Here is what happened in the global stock markets:
As you can see, there was an amazingly uniform rally across the board. Call me a skeptic, but I am always a little suspicious when things look too good to be true! This applies to backtests, portfolio construction, financial deals… and economic conditions.
I am not going to guess whether this rally will continue – I have some long’s and some shorts in the markets so chances are that something in my portfolio will benefit either way, but I do have a concern that this might just be a stereotypical wave of optimism in a bear market. After all, some of the biggest up days (and weeks) in the market do occur in a bear market.
I guess what I am saying is keep calm and follow your systems. Getting all excited that the world is fixed and the markets are all up from here might be premature. I am watching the S&P 500 with interest as it rapidly approaches the previous high:
Strangely, I have a bit of a perma-bear inside me, which I need to ensure doesn’t make any investment decisions. It keeps wanting and expecting the next big decline. The problem is a broken clock is right twice a day, and my inner perma-bear really wants to be right.
My approach to dealing with this part of me is to make sure that I have short systems that will turn on and profit in a collapse… but I don’t let it take control and short the world on a whim. My rational side is too strong for that – I instead trade a very diversified portfolio of systems and expect that, over time they will make money no matter what happens.
In Crypto Land, the trial of Sam Bankman-Fried found him guilty on all seven counts of fraud, conspiracy, and money laundering… I am not sure that was ever in doubt, though you never know what all that money he stole could buy I guess??? At least he will get some of the punishment he deserves, though that doesn’t bring investor’s money back, at least it gives some level of justice.
The Cryptocurrency markets are heating up, which is interesting. The uptrend is continuing to prove itself, though it certainly hasn’t gone exponential (yet). No doubt crypto fans are dusting off their accounts and getting active again. This is a space to watch closely because if the bull really takes off there could be some substantial gains to be had.
In typical crypto style, the moves have been big – from the bottom of the most recent decline to now, Bitcoin has more than doubled… but remember that is off the back of a 75% decline. So there is still plenty of upside potential in the coming bull market.
I am getting more and more messages about Crypto from traders, which shows an increasing interest in the markets again. Enough water has passed under the bridge since the FTX debacle and the next Bitcoin halving is rapidly approaching (forecast for around April 2024).
According to Cointelegraph, every halving event has historically resulted in a bull run for Bitcoin, and it looks like the market is getting ahead of the curve for this next one. I am watching the crypto markets closely and am very happy that my portfolio of crypto systems is running on autopilot behind the scenes.
If you want to take advantage of the huge diversification potential of the crypto market and make sure you don’t miss out on the potential bull run, now would be the perfect time to join The Crypto Success System.
In The Crypto Success System, you will learn exactly how to trade crypto with 9 different crypto-specific trading systems. You will also learn how to manage your risk and diversify your holdings to protect yourself.
Take advantage of the diversification potential and the emerging strength in the crypto market and join The Crypto Success System today!
I am constantly thinking about the markets and finding new ideas to test. From today’s newsletter, I am going to start posing some questions that I am thinking about but do not know the answer to. Hopefully, this will stimulate your thinking, and if you have already investigated this idea, maybe you can share your results, and I’ll include them in next week’s newsletter. Here is my first market curiosity…
“I wonder if the fatness of tails in daily price changes (kurtosis) in the stock index can be used in a regime filter to separate bull from bear markets”
Let’s see if anyone comes up with some interesting findings – comment below with your conclusions and I will publish the best response in next week’s newsletter.
Trading Tip of The Week
I had a fantastic onboarding conversation with a new member of The Trader Success System this week and one of the great insights that I wanted to share was to do with momentum.
I recorded this video for you – watch it here, then give it a thumbs up and leave me a comment so I know you have watched it. Click the image below to watch:
Member of the Week
My member of the week this week is Ross… Ross gave me the idea for the Market Curiosity segment of the newsletter which I shared just above as a way to challenge and engage readers. I am always looking for ways to increase engagement and challenge my readers to grow into stronger traders so I thought was a great idea – Thanks Ross!
News From EST
We have started the countdown to Trader Acceleration Week – it is going to be epic and I can’t wait! If you haven’t registered for this FREE week-long coaching event, click the banner below and get on board.
I will be training and coaching for 1 hour every day for 5 days… and it is totally FREE, so jump on board!
On the Home Front
Stephanie and I attended a business seminar last week and were absolutely blown away by what we learned about the power of AI in business. We had a huge week of growth and are really excited to implement what we learned into Enlightened Stock Trading.
In case you don’t know, Stephanie is my amazing wife, and also the Chief Operating Officer and Head Psychology Coach at Enlightened Stock Trading. Together we spend a ton of time and energy building Enlightened Stock Trading to help you and other traders globally improve.
In a nutshell, here is what we do…
“We mentor people who trade stocks and crypto
& are erratic, discretionary, and uncertain
transform into consistent, confident, and rules-based traders
using proven systems, not their emotions”
Why do we do this exactly?
Because we love working with traders and enjoy sharing our experience and expertise, we want to transform the way trading education is done globally and spark a massive shift towards empowering traders to take control of their own finances with confidence. Growing Enlightened Stock Trading allows us to work towards this mission, helps us improve our own trading by teaching what we know, and of course gives us greater diversification than trading alone. We believe traders should strive for multiple streams of income as well as building their wealth in the markets.
Don’t forget to register for Trader Acceleration Week!
Remember – You’re only one system away!
Founder & Master Coach | Enlightened Stock Trading