“Curb your enthusiasm.” Easy to say, hard to do!
At the end of the day, enthusiasm moves stocks. Meme stocks like AMC Entertainment (NYSE: AMC) and Blackberry (NYSE: BB) rocketed up as the Reddit community all banded together and bought these dumpster stocks with great eagerness.
Back in the late 90s, investor enthusiasm for tech stocks was so rampant and reckless that Fed Chair Alan Greenspan coined the term “irrational exuberance”. I’m quite certain that Alan would deem the rash of Meme stock enthusiasm “irrational”.
That’s how we humans roll. We tend to overreact. Terms like “FOMO” (Fear of Missing Out) have even been coined to describe trader humanity. FOMO drove Bitcoin up 850% from $6,890 to its all-time high of $65,520 in a year without any real rationale behind the move.
Traders can also be enthusiastic about dumping stocks… like Bitcoin, which dropped over 50% from its all-time high in a month. It happens with stocks. It happens with real estate. It happens in anything we humans invest in.
Enthusiasm can be based on hard data like earnings. It can also be purely emotional. It can be both.
The bottom line is it doesn’t matter what the source of the enthusiasm is. Either way, if we can detect the sentiment and ride the wave, we can cash in.
And that’s a much harder science then you might initially think…
Let me show you exactly how I translate emotion into cold, hard cash – and give you a couple of the names I’m looking at…
Here’s the “No-Fail” Tool I Use to Spot Upward Movement
Tom Gentile here.
When a trade’s volume surges, we strike… or at least check out what’s happening.
You see, our job as traders is to identify the right moment to enter a position.
And in saying that, I’m not telling you to wager a random guess based on how you think a position will move…
I’m talking about using tools and strategies to identify your probability of success.
And two factors that often sets off smoke signals about a trade’s growing momentum include volume and open interest.
That’s why in this week’s video, I’m covering how you can scan for all the signals using my brand-new tool.
Check out the full story here…
Following typical annual trends, mid-June has once again brought on the summer slump.
With such little news coming out of D.C., I’m cautiously optimistic that we’ll see slow – but fairly steady – growth over the summer.
Now, don’t get me wrong – just because the market is sluggish doesn’t mean there isn’t money to be made.
What’s the name of that popular precious metal again? You know, the one that humans have fought and died for over millennia? The one with a limited world supply that could be contained in two Olympic-sized swimming pools and that many investors gobble up as safe investments? Oh yeah! GOLD! That’s it!
Mankind has had a love affair with gold for millennia. Although it is estimated by the US Geological Survey (usgs.gov) that 244,000 metric tons of gold have been recovered to date and with approximately 3,000 tons of new gold mined each year, to be clear the supply is limited. Demand is high and will only get higher as the world’s population increases by over 1% per year.
To be fair, gold has been a dark horse for awhile. It hasn’t been occupying much media space since Covid-19 graced the scene.
But…stealthily….gold has been on the rise for months now.
Ever since the shine started to wear off the bitcoin bubble, that speculative cash has been pouring quietly back into safe havens.
And now is the perfect time for all you gold bugs to get a piece….
I wanted to let you know that I will be going live on my YouTube channel at 11am!
There’s an old trading adage, “Sell in May and Go Away”. The idea is that stocks don’t perform as well between May and October as the rest of the year. From 1950 to 2013 that was indeed the case. Over this period the Dow Jones Industrial Average posted lower returns than in the November to April period. According to Forbes, between 1950 and 2013 the Dow averaged a 0.3% return during the May-to-October period versus an average 7.5% during the November-to-April period.
However, this has not been the case since 2013. Since 2014, the Dow has risen an average of 3.32% during the May-to-October period.
Here’s the thing about historical trends. They repeat except when they don’t. The truth is that no one knows for sure which way the market will head tomorrow. Predicting the future works that way. The trick is to find historical patterns that repeat the most and count on them repeating again.
So, with the “Sell in May and Go Away” adage busted, the question still remains, “Which way will the stock market go from here?”
I think down.
And you guessed it, I have a downside play to recommend…