There are no domestic macro-economic events worthy of note scheduled for release today. Ditto for the earnings calendar. Oh, you’ll get your fill (and then some) of headline level data-points this week, and even a couple of notable quarterly earnings as well. In fact, this might have been a sleepy, short week, Monday morning…. might have been….. if not for the high volume proverbial crowbar to the proverbial back of the skull that many of your portfolios took on Friday afternoon.
Global equities are painted a light shade of green this morning, with some noticeable exceptions (Spain, Japan), and US futures, at least in the early going are quite strong. As we all know…. pre-opening futures pricing can often be a result of momentum traders who are trying to swing for the fences, and not actually indicative of where stocks will open. Then again, the stock market is, in my opinion, oversold at this point. Sat down this weekend, did a lot of homework. Expected to re-weight the portfolio (two weeks ahead of schedule)….ended up deciding to leave a lot more in place than I had originally expected.
What Should I Do, Sarge ??
What happened last week? What’s ahead? Everything that has pushed our markets sharply in one direction, or the other is still out there. The US economy is still weaker than the surface statistics indicate. Just ask someone who doesn’t live in a castle. The Fed is still, and will continue to be a wild card until it’s last days. (Probably not soon. A boy can hope) The balance between the benefits of, and the damage caused by cheap energy prices have left no clear winners. Have I mentioned the strength of the US dollar ???? Eeegads. The point here is that you better make friends with volatility. Understand it, know it. You’ll never defeat it, but like a ballplayer who has just made an error in the field, you can not let it impact your performance at the plate. Never react to volatility with an unplanned move. Having a plan A, and a plan B for every single position on your book removes emotion. If you can’t do that, then I still love you, but this ain’t your thing.
Feeling Better About Yourself
What you might not know about the great traders… is that they’re wrong a lot. A lot. Trust me, I know, and follow a number of them. Many great traders are wrong almost three quarters of the time. Although you should always have a reason when you act….The trick is not to be right all of the time. The trick is recognizing when you’re wrong before the loss is catastrophic. That is the trait that the great ones share. I’m not talking about the really famous guys who can go out to the shed for another wheelbarrow full of money when they need to. I’m talking about folks who really don’t have a net under them when they fall. Agility is the key. See Plan A, and Plan B comment above. Now, go get ’em. .