Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
OldFng Guy
Oct 03, 2023 11:56AM ET
What about Tuesday's price action?
0
0
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
Extended Sale! Save on premium data with Claim 60% OFF
S&P 500: Why Monday’s Strange Price Action Didn’t Surprise Savvy Traders
www.investing.com/analysis/sp-500-why-mondays-strange-price-action-didnt-surprise-savvy-traders-200642326
S&P 500: Why Monday’s Strange Price Action Didn’t Surprise Savvy Traders
By Jani Ziedins | Oct 03, 2023 12:17AM ET The S&P 500 finished Monday’s session unchanged. This isn’t the price action most investors would have expected if they knew a last-second deal would avert the October 1st gov’t shutdown. But the market has a nasty habit of not doing what most people think. (Hence why so many inexperienced traders complain, “the market is fixed.”)
There are a few reasons this weekend’s budget deal didn’t move markets. First, this is nothing more than a patch job that, at best, delays the budget fight for a few more weeks. Second, if the disgruntled Republicans depose McArthy, then the next round of negotiations could end up being even more contentious. And lastly, a gov’t shutdown happens every few years. It isn’t a big deal, and the market wasn’t really worried about it. If stocks don’t fall much on a headline, they don’t have much room to rebound after everything gets solved.
As readers know, I bought last week’s bounce:
Thursday’s price action played out as expected, and everyone with the courage to buy Wednesday afternoon’s bounce is sitting on a nice profit cushion. Move stops above our entry points and this is practically a free trade. If the rebound continues, we make a pile of profits. If the selling resumes, we get out near our entry points for a breakeven trade. That’s a phenomenal risk/reward, and only a fool would criticize it.
As it turned out, I got stopped out for a small gain Friday afternoon after lifting my stops above my entry points. While this wasn’t the trade I was looking for, being wrong about the bounce and still making money isn’t a bad thing. Give me a free trade and I will take it a million times over.
As for what comes next, not falling on Monday is always better than falling, especially given what September looked like. Unfortunately, the longer we hang out near recent lows, the more likely it becomes that we make new lows.
I am not a bear by any stretch of the imagination, but if this market is going to bounce, it needs to happen soon. I will buy back in if prices bounce on Tuesday, but I need to see constructive price action first. Until then, I’m sitting on my hands and watching this from the safety of the sidelines. (Aggressive traders can short another breakdown.)
Related Articles
2 Charts for the S&P 500 Nobody Talks About
By Dr. Arnout ter Schure - Dec 05, 2023
5
Those who read our articles regularly know we primarily focus on the Elliott Wave Principle to forecast where the stock market will likely go next. However, for our premium...
Wall Street Analysts Are Optimistic for 2024: Should You Be, Too?
By Lance Roberts - Dec 05, 2023
4
It’s that time of the year when Wall Street polishes up its crystal balls and pin targets on the S&P 500 for the upcoming year. As is often the case, while Wall Street is always...
5 Stocks to Buy as Stock Market Gears Up for December Rally
By Ismael De La Cruz - Dec 05, 2023
4
December is the third-best month of the year for the stock market historically There are a number of stocks that consistently beat the market by a wide margin during this month We...
S&P 500: Why Monday’s Strange Price Action Didn’t Surprise Savvy Traders
Comments (1)
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.