TLDR: A lot can happen in a week, the weakness I discussed in my last update has accelerated:

  • S&P500 down 3% on the week with and had 6 down days (open to close) in a row!
  • The Nasdaq 100 was hit the hardest as it probably had the furthest to fall and is down over 5% for the week
  • Most stock markets globally are lower than a week ago with notable weakness in Germany, Japan and Taiwan.
  • Not a lot of chance in the major FX pairs this week
  • Cryptocurrencies continued their correction with Bitcoin is down 4.5% and altcoins down 3.6% compared to a week ago

Last week I said that this feels like a risk off scenario to me – turns out that feeling was correct and the markets have continued to weaken. After 6 lower closes on the S&P we could see some temporary recovery but I am not going to get too excited on the long side until we see a new higher low.If you don’t have any short side systems then this could be considered a warning sign to get prepared.

Stock Market Update |The Enlightened Trader – Are you prepared? - Table of Contents

US Markets:

The mighty Nasdaq has finally relented and had a dip this week. Most sectors of the US markets were down, however, we are NOT in panic territory (yet) as the Consumer Stables and Healthcare sectors were both up last week. Usually when people start losing their minds and panicking about the markets everything falls. So we are not quite at that stage just yet.

It is possible that this is just another correction which is normal – we won’t know for sure until we see a low form followed by a short term high and a new lower low. In the mean time follow your systems and take any exit signals (as you always should)  in case this gets worse.


As you can see in the table below stock markets globally followed the US markets down last week. Particular weakness occurred in the Japanese and Taiwan markets (which I suspect very few of my readers trade – please comment and let me know if you trade either of these markets, I would love to hear from you).

Despite the Hong Kong market being down I have not been thrilled with my short system’s performance in the last week. I was not able to get borrow stock for a number of signals and the stocks I am short are a bit of a mixed bag at the moment. This is one of the unfortunate challenges of trading stocks short – you can’t always take every trade because there is not always stock available to borrow


SIDE NOTE: I have had a lot of people ask me how I am producing these awesome dashboards of stock market performance. I use the XLQ addin for Excel which allows me to pull a wide range of stock / index / commodity / forex and other financial data into Excel. The cool thing is it can pull data from Norgate Data into Excel(which is what I have used for the table above) , Yahoo and a variety of other sources into Excel too. It is hugely useful for tracking your positions, open trade profits and a range of other reporting functions that traders need to do. Check out XLQ here and get a $50 discount.

Cryptocurrencies took a tumble earlier last week but have stabilised over the last couple of days. The Bitcoin chart below now looks like a wide consolidation range rather than a change in trend at this point. Consolidations between explosive trends are typical for the crypto markets and I don’t consider them anything to worry about.

If the market breaks out of this consolidation and continues upwards our trading systems from The Crypto Success System will profit nicely. If the break is to the downside then our short system will kick in and should cushion the decline.

The recent crypto volatility is completely normal for this market and is exactly why with a small allocation of capital to crypto we can get such great diversification benefits compared to with a stock only portfolio


Your Trading Psychology

Procrastination can creep into your trading in many ways, but I have noticed a lot of readers have been procrastinating to avoid diversifying into different markets such as cryptocurrencies.

Procrastination in terms of diversification cost me very dearly early in my trading career, and I have often said that I would be much more wealthy today had I diversified out of Australian stocks earlier… I can’t go back in time and fix that mistake, but I can help you avoid the same mistake.

Lack of diversification and exposure to different markets and asset classes can dramatically limit the growth and resilience of your portfolio, especially if you are only focused on one traditional stock market.

For systematic traders, the reluctance to explore beyond familiar territories can mean missing out on significant opportunities in hugely profitable markets like crypto, where volatility often translates into high potential returns and solid diversification compared to stocks.

For our typical trader, who is already established in his career but not yet where they want to be in terms of financial security and early retirement, the delay in diversification adds a layer of risk, particularly during stock market downturns.

Moreover, the crypto market relative youth and immaturity means that the systematic trading approach can be very profitable simply because the market is still so emotionally driven. Remember that when emotions are up, intelligence is down… when intelligence of the masses is down, that is when systematic trading really shines!

By giving in to procrastination and not engaging with these dynamic markets, you are not only leaving money on the table but also failing to protect your investments against market-specific downturns through effective diversification.

If you are keen to break through procrastination and enter the crypto markets, I strongly suggest you do it with guidance to get a portfolio of proven systems in place quickly – If that sounds like something you want, then I highly recommend joining the Crypto Success System.

This program is designed specifically for traders like you who are looking to expand beyond stocks and build a diverse, robust portfolio. With the Crypto Success System, you gain access to proven trading systems and step-by-step guidance to master crypto trading.

Don’t let procrastination keep you from the wealth-building opportunities crypto offers. Act now, diversify your portfolio, and accelerate your path to financial success. Join the Crypto Success System today and secure your trading future.

To further enhance diversification potential we have 9 different crypto systems (long term and short term, long side and short side)… Check out The Crypto Success System to learn more… and yes we can even show you how to fully automate your crypto trading!

Trading Tip

Good trumps Perfect.

What does this mean?

It means having a GOOD trading system that you can put into action now is far more valuable than working on that trading system for months or years to try to make it perfect.

This is true for a number of reasons including:

  • Launching a good system now means you start growing your account sooner
  • Trading a good system will give you many more improvement ideas than endlessly backtesting to find perfection
  • A diversified portfolio of good systems is far more powerful than a single (potentially overfit) perfect system
  • Working on a good system to make it perfect will inevitably lead to overfitting the system and turning it into a loser
  • You can find 5 or more good systems in time it takes to create one perfect system, and those 5 good systems combined will perform better!
  • Launching a good system is satisfying, endlessly backtesting is frustrating

There are so many reasons Good trumps Perfect… give up the need for perfection in your trading (it is unattainable anyway) and watch how much faster your progress becomes.

Member Wins

This week I want to call out one of our amazing Trader Success System members, James S who is working meticulously through the Trader Success System, has been showing up, asking better and better questions every week… in fact at last count has asked over 25 questions in our members forum – THAT IS THE WAY YOU LEARN!

Well done on your great progress James – I really love seeing how your thinking is evolving through your questions!

On the Home Front

I just got back from a week of holiday in Melbourne where we were touring Universities with my kids. My son finishes high school this year so we are looking for his right next step. We had a great time looking around each uni campus… and eating / doing tourist things. As a result my brain still feels on holidays – please forgive any typo’s in this update 😉

That’s all for this week – Remember Good trumps Perfect every time.

Remember – You’re only one trading system away!

Adrian Reid

Founder – Enlightened Stock Trading

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