The Market is Telling Us Something, and You Better Listen Up
You’ve heard analysts, and financial gurus, and pundits say, “The market just wants to go up,” which makes the market sound like it’s a living, breathing thing and makes its own independent decisions.
Well, it is. The stock market is, in a very real sense, a living, breathing “thing.”
That’s because the market’s made up of traders and investors, and you better believe they make their own decisions, even when those decisions are more dependent than independent, as they are now.
And right now, the market is telling us something, and for your money’s sake, you better listen…
Don’t Stand in the Bull’s Way
In Monday’s Capital Wave Forecast, which comes to you at the beginning of every week, I explained how the previous week’s stock market action had set the stage for stocks to break out, and said, “Bulls have the floor, and they’re mopping up the bears with their buy-this-dip mentality. Don’t stand in their way.”
Hopefully, you didn’t. Because we did break out big-time, through first-line resistance, then through secondary resistance.
Later in the Capital Wave Forecast, I laid out those resistance levels, saying, “The Dow’s got resistance between 28,000-28,330; if it gets above there, as scary as it will look, it might be worth buying into, with tight stops for sure. The S&P 500’s got resistance at and between 3,400-3,430. The Nasdaq Composite’s got resistance between 11,300 and 11,350.”
We’re well above those levels this Friday morning, as I write this Total Wealth pre-open.
Why are we going higher? Because the market just wants to go up.
In Wednesday’s Total Wealth, I wrote of the election and it possibly being contested. I said, “No matter who wins, it’s in everyone’s interest to make money, to fix the economy, to strengthen capital markets, strengthen the country’s defenses, insure the public’s health, and make sure the stock market reflects the country’s optimism, retirees’ hopes and dreams, and is a safe place, especially for the millions of young, new retail investors who see the stock market as a place where they can pursue the American Dream. That’s why I’m not worried and how I know the markets are going higher.”
How is it I’m right? Where do I get my insight or idea that stock market is going higher?
Because I’m listening to what the market tells me.
It’s not analysts or gurus or pundits that say the market just wants to go up that means anything to me; it’s the market actually telling me that, telling everyone who listens to what it’s saying, and understanding the psychology behind its moves.
The living, breathing aspect of the market is its “psychology,” which is simply the manifestation of traders’ and investors’ fear and greed.
How do I know the market just wants to go up? Because in the face of so much fear about the virus, unemployment, the economy, earnings, the election, the stock market selling off… the market’s still been going up, and up, and up.
That’s, in a sense, the psychology of optimism at work – maybe of greed, maybe FOMO (fear of missing out) manifesting itself, maybe a lot of mental machinations.
It doesn’t matter to me. I’m not a psychiatrist; I’m not the market’s psychiatrist. I just watch what it does and how it acts, and I listen.
The market looks like it just wants to go up because it is going up. That’s all you need to know.
When I said up earlier, “traders, and investors make their own decisions, even when those decisions are more dependent than independent, as they are now,” I was talking about the difference between thinking independently about the market, which can get you in a lot of trouble.
After all, the best way to make money in the market is following the signs the market gives. You can’t force your own opinions or projections on the market. You have to let the market act the way it wants to, and then capitalize.
And that’s exactly where my colleague, Tom Gentile, comes in.
Uncertain times, and mixed messages from the media and markets, calls for new ways to make money. Everything’s changed this year, and that means that the old way we used to make money has to follow suit.
Trading with the four-day profit cycle beat the S&P 500 nearly 17 TIMES over in the first eight months of this year.
It’s ridiculously easy, doesn’t take a lot of money or time, and first-time investors could have used this edge during those first eight months to DOUBLE their money in as little as one day. You can do it, too – just click here to learn more.
So, listen to the market. And now, despite all the “fears” out there, it’s telling us, it just wants to go up.
Go with it.
If it changes its mind, it will tell you.