Friday marks the end of the week for most of us, and generally by the time 4pm strikes we have two feet dedicated to the weekend already. But, for those of us that are proactive about finding and isolating better investment opportunities, how the financial markets close is golden information for the upcoming week ahead. It can often mean the start or end of a macro trend in stocks, commodities, bonds, or any other negotiable instrument.
That said, lets keep it light and take a look at two charts to see what we can learn. First up is the daily S&P 500 index below. As you can see, I have highlighted the major swing structure to highlight how the overall market is behaving. In other words, it's critical to understand whether the buyers or sellers are in control.
Can you see who is dictating the momentum of the stock market from this image? Note how the original blue line was drawn to capture the first swing to the left and was simply copied and pasted onto the most recent swing which represents the current action from the past week up to today's close, which was up 1.44%
Now, on the daily above (or macro perspective), the market looks healthy and consistent with the previous behavior so nothing to worry about, right? Maybe or maybe not.
Let's zoom in and take a look at the 2 hour chart below. Notice how the market got smacked down three consecutive times at the 2930 to 2940 level? This is where we can gain an edge over most investors that simply think the "buy and hope" strategy is somehow going to help them get returns above 6-8 percent.
Bottom line, if this area gets challenged next week, it could be the beginning of a bear market that the press will be talking about in another month or two. Or, it could be the battle ground where bulls actually blast through and take the market to new all-time highs.
At the end of the day, investors show their hand by what the market does, which is reflected in the bars on a chart. NOT by what they think the economy is going to do or how many times the fed is going to cut rates or whatever else the media discusses to sell ad space.
As always, there is so much more to learn about these charts. Greater clarity in anything, ultimately means more opportunities to choose from. Wouldn't it be more enjoyable to approach investing with a real edge as opposed to getting filtered information by someone you think knows better than you?
Similar to golf, we all have our own unique swing. Don't take my word for it or judge me based upon a single qualification on a dead resume, or something I accomplished in college. The truth is, if a so-called professional can't show you in real-time where a particular stock is headed, then they are guessing.
We don't guess at Principles and neither should you, especially since it's your money. Remember, no one cares more about your hard-earned savings than you do.
Caveat, here comes the hard sell -- If you're ready to stop guessing and take your knowledge to the next level then sign up today risk-free (or keep making the same mistakes so the pros can eat your lunch). It is your CHOICE ----> https://www.principles1.com/plans-pricing