| | | | This is the Wrong Exit
Author: Corey Snyder, Publisher
"If the rule you followed... brought you to this...
of what use was the rule?" -Anton Chigurh, No Country for Old Men (2007)
I've seen more bearish posts this week than I think I've seen in the past year…
Mostly from folks that are somewhat newer to trading.
That's a relative term, of course, because even a twenty-year veteran is a newborn compared to someone like George Soros or Warren Buffett…
But at this moment, you can pull up videos and tweets from people who have given up on the stock market.
Many of them, at least from what I've read and heard them say, don't follow a true strategy…
Or do they?
This is becoming more common than you might think...
Now, buy and sell orders are really no different from our daily purchases at the store (or online if you're like me)...
These decisions are rules-based, even if they're subconscious, but where those rules come from is far more complicated.
Follow the Leader
When pulling up social media, we have a tendency to react rather than perceive what we've just started ingesting…
Aside from the random photos of friends and colleagues with their pets and kids, there are likely industry leaders and experts that show up in your feed...
You follow them, but more importantly, you trust their expertise.
For example, "Big Seth" is a mountain of muscle mass and you've been wanting to pack on some size to impress your significant other… And he's showing off his gym equipment.
This inevitably leads to your buying decisions… Then, your neighbor notices… and he does the same even though he suspects that the equipment may be faulty. The cycle continues and others follow suit.
What I've just described is an "information cascade."
Take this and apply it to the stock market in a new world of social media where nameless, faceless individuals - unlike Big Seth - are throwing out ticker symbols left and right…
Only in this example, there's zero accountability… This can create serious problems.
But what's important here is that these folks pulling their money from the market actually have developed a strategy and set of rules for how they invest.
They just don't know it…
And for many of them, it's to buy what others buy and when that doesn't work out, the market is rigged and it's time to quit.
Time for a Break
I've always had an affinity for testing out the rules set for me to follow.
Most of the other traders and colleagues I know are the same in this manner.
It's possible that this applies to all things in life, but it's undoubtedly applicable to the market…
Testing the rules of trade setups... bending them… and even breaking the supposed "laws" of investing...
Many of my losers are a result of this… and I'm not talking about paper trades either.
In fact, I've never paper-traded a day in my life. There's another broken rule.
Eventually, those losses were what corrected my thinking when it came to buying and selling - I had to know that it was me or what I believed to be true that was in fact wrong.
And there needed to be some pain involved… I believe this to be the greatest teacher when developing a strategy, which is also what those leaving the market fail to understand.
(Now, to be clear, I've never recommended any of these trades to anyone, nor would I as these are my personal tests.)
But as much as I tend to dislike rules, I found that the ongoing "lab-tests" have helped me in developing sets of guidelines for various strategies, at the very least.
Those can bend plenty…
Because when your guidelines fail you, you can simply run another test.
It's the anonymous tip you get that creates bad rules...
Those you break. |
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| | | | | | | Did you buy at the wrong time, or at the wrong price? Both factors are essential when it comes to trading options.
Options Coach Chris Hood shows you what to look for so you can buy options at a discount.
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| | | FINAL PRINTS: The Major Indices Wrap-Up |
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| Index
S&P 500
Dow Jones
NASDAQ
Russell 2000
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| Weekly +/-
-42.39
-182.31
-274.68
-116.76 |
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| % Change
-0.97%
-0.52%
-1.87%
-5.12% |
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| Close
4,327.16
34,687.85
14,427.24
2,163.24
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| % YTD
+15.20%
+13.33%
+11.94%
+9.54%
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| | | MARKET WHISPERS: The Weekend Scoop
- Back to the Bottom - Shares of Biogen (BIIB) stock have continued to fall amid the ongoing controversy surrounding its drug Aduhelm, the first Alzheimer's drug to be approved by the FDA. After multiple FDA committee members left due to their personal views on the drug approval and reports of information allegedly being passed between the company and FDA, the $56,000 cost is only adding fuel to the fire. The company's vice president, Chris Leibman, referred to the "$355 billion per year" cost of the disease when explaining the drug's annual price. Need more math on this one.
- No More China? - The latest ruling by the Chinese government has many tech investors concerned as it may lead to the end of all dual listings of Chinese companies in the U.S. within the next decade, according to Bloomberg sources. Chinese firms looking to go public in other countries will now undergo a stringent examination from the Cyberspace Administration of China prior to listing. The day traders must be having a fit right now.
- Not Again - After slightly bouncing back from its swift plummet, Lordstown Motors (RIDE) may still see more downside. The EV maker confirmed rumors of a probe by the DOJ (Department of Justice) into the reported preorder numbers prior to completing its SPAC merger to list its shares publicly. Lordstown released a filing also stating the DOJ would be looking into the details of the deal struck between the company and DiamondPeak Holdings (DPHC). Is former CEO Steve Burns still on the hook for this?
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| | | HIT OR MISS: Who's on Deck for Earnings
- Monday, July 19th - International Business Machines (IBM), Prologis (PLD), PPG Industries, Inc. (PPG), J.B. Hunt Transport Svcs. (JBHT), Crown Holdings, Inc. (CCK), Steel Dynamics (STLD), Zions Bancorporation (ZION), AutoNation, Inc. (AN), PacWest Bancorp (PACW), Cal-Maine Foods (CALM), PetMed Express, Inc. (PETS)
- Tuesday, July 20th - Netflix (NFLX), Philip Morris International (PM), Intuitive Surgical, Inc. (ISRG), Canadian National Railway Co. (CNI), UBS AG (UBS), Chipotle Mexican Grill, Inc. (CMG), The Travelers Companies, Inc. (TRV), Synchrony Financial (SYF), Interactive Brokers Group (IBKR), Dover Corp. (DOV), Avangrid, Inc. (AGR), Teradyne (TER), Ally Financial (ALLY), KeyCorp (KEY), Halliburton Co. (HAL), United Airlines (UAL)
- Wednesday, July 21st - Johnson & Johnson (JNJ), ASML Holding N.V. (ASML), Coca-Cola Company (KO), Verizon Communications, Inc. (VZ), Novartis AG (NVG), SAP SE (SAP), Texas Instruments Inc. (TXN), Anthem, Inc. (ANTM), Crown Castile International Corp. (CCI), CSX Corporation (CSX), Kinder Morgan, Inc. (KMI), Las Vegas Sands Corp. (LVS), Discover Financial Services (DFS), Equifax (EFX)
- Thursday, July 22nd - Intel Corp. (INTC), Abbott Laboratories (ABT), AT&T Inc. (T), Danaher Corp. (DHR), Union Pacific Corp. (UNP), Snap, Inc. (SNAP), Capital One Financial Corp. (COF), The Blackstone Group (BX), ABB Ltd. (ABB), Edwards Lifesciences Corp. (EW), Twitter, Inc. (TWTR), Newmont Corporation (NEM), Freeport-McMoran, Inc. (FCX), Biogen Inc. (BIIB), American Electric Power Company (AEP), Southwest Airlines Co. (LUV)
- Friday, July 23rd - Honeywell International, Inc. (HON), NextEra Energy, Inc. (NEE), American Express Co. (AXP), Equinor ASA (EQNR), ICICI Bank Ltd. (IBN), Roper Technologies, Inc. (ROP), Kimberly-Clark Corp. (KMB), Schlumberger N.V. (SLB), Regions Financial Corp. (RF), Shinhan Financial (SHG), NextEra Energy Partners, LP (NEP), Gentex Corporation (GNTX), Triton International (TRTN)
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| | | | | | | | | | Copyright © 2020 Rogue Investing. All Rights Reserved. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Rogue Investing.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. By downloading this book your information may be shared with our educational partners. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of Rogue Investing.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. An InvestPub Company. |
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