It has been a wild week for the stock market. But, some folks may not have noticed.
The S&P 500 started last Friday’s session near 4360. It will start today near that same level. So, if you had fallen asleep for a week, you might wake up and wonder what all the fuss is about.
You would’ve missed Monday’s big stock market drop. And, you would’ve missed the equally big bounce on Tuesday and Wednesday.
Maybe that’s a good thing.
You slept through everything… you didn’t panic out of or into any trades… and you finished the week breaking even. That’s an acceptable result during a short-term bout of volatility.
But, what if the market acts this way for a long time? What if this “highly volatile but ultimately go nowhere” action keeps up for the next three years?
That’s a long time to sit around to just break even – especially if you’re relying on the returns from your portfolio to fund your retirement. But, unfortunately, that’s what most “buy-and-hold” investors are going to be stuck with – a long period of breaking even.
You see, the stock market action over the past week is likely to be the sort of action we see for the next few years. And, you should get used to it.
I call it a zero-sum market. It’s a volatile tug-of-war between the bulls and the bears that ends up with the stock market going nowhere, and with the typical buy-and-hold investor making zero returns.
But for traders, it can be paradise.
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Think about it this way…
What if you followed the advice in Monday’s Market Minute essay – where I detailed the oversold conditions and suggested, “Traders should take advantage of the situation and buy stocks into any weakness early this week, in anticipation of a solid bounce in the days ahead.”?
You would have bought stocks on Monday when the S&P 500 dropped as low as 4240. Then, you could have sold them yesterday when the index traded above 4360 – that’s nearly a 3% gain in just a few days.
Of course, a 3% gain may not seem like much. But, it’s a whole lot better than just breaking even. And, if you can do it every week… it sure adds up.
That’s what I discussed in my special webinar presentation I gave last night. We talked about how the market is transitioning into a “zero-sum” environment, and I detailed my strategy to profit off it so that my readers will be prepared.
Given the action this week, the timing of the presentation couldn’t be better. And, if the market behaves as I expect it to in the coming months and years, the strategy we outlined could be enormously profitable.
If you didn’t get a chance to see my presentation you can still do so by clicking right here to watch… but don’t wait, it won’t be available for long.
Best regards and good trading,
Jeff Clark
Eoin’s Insights
Happy Friday Market Minute readers. I hope you tuned into Jeff Clark’s presentation last night, I know I enjoyed it. Today, I have another brand-new presentation on what’s been going on in the markets.
I’ll be going over current inflation pressures, demand in commodities, and concerns about the COVID delta variant. Just click below to watch.
Reader Mailbag
Are you prepared for this “zero-sum” market? Do you think it’ll be here to stay for the next few years?
Let us know your thoughts – and any questions you have – at [email protected].