{"id":20441,"date":"2022-12-13T07:30:26","date_gmt":"2022-12-13T12:30:26","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=20441"},"modified":"2022-12-13T07:30:26","modified_gmt":"2022-12-13T12:30:26","slug":"minimizing-risk-during-a-big-market-move","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/minimizing-risk-during-a-big-market-move\/","title":{"rendered":"Minimizing Risk During a Big Market Move"},"content":{"rendered":"

Today could be a wild session for the stock market…<\/p>\n

The consumer price index (CPI) – a widely followed measure of inflation – for November will release at 8:30 a.m. ET.<\/p>\n

And today’s report may give traders a glimpse at the future direction of interest rates.<\/p>\n

A “hot” report showing persistent inflation will keep pressure on the Fed to raise interest rates even more. A “cold” report showing a lower-than-expected CPI, could give the Fed a reason to pause.<\/p>\n

Either way, today’s number is likely to spark a big move in the stock market – in one direction or the other.<\/p>\n

Take a look at this chart of the S&P 500…<\/p>\n

\"Chart\"<\/div>\n

The blue arrows point to the action following the past three CPI reports. Those were some of the biggest one-day moves we’ve seen all year.<\/p>\n

The stock market was rallying going into the release of the CPI report on September 13. The index lost 180 points that day – the stock market’s worst day in two years. <\/p>\n

And the S&P 500 was falling going into the October 13 release of the CPI report. The index gained 90 points following a hot report. It gave up most of those gains the next trading day.<\/p>\n

In November, the CPI report showed inflation was cooling off. The S&P 500 exploded 200 points higher – logging the best day of the year for the stock market…<\/p>\n

So today’s report is likely to be the catalyst for a big<\/em> move.<\/p>\n

The question of course is… Which way? I don’t see an edge to either direction.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The S&P 500 is trading near the same level it hit following the November 10 report. It has neither gained, nor lost ground.<\/p>\n

There are plenty of bearish technical indicators that support a move to the downside. But seasonal factors and investor sentiment (a contrary indicator) support a bullish move.<\/p>\n

Betting on today’s direction seems to be nothing better than a 50\/50 proposition. There’s no edge. And when there’s no edge, it’s better to not make the trade.<\/p>\n

Whenever there is the potential for a big move in the markets, traders feel pressured to take a position. Just think of the gains you’ll be missing out on if you don’t place a trade.<\/p>\n

That’s the gambler’s thought process – focusing on the reward and ignoring the risk.<\/p>\n

Successful traders focus on risk. We look for conditions that reduce our risk and increase the probability of a profitable trade.<\/p>\n

If we can’t find those conditions, we stay on the sidelines. And we ignore FOMO (the fear of missing out) on a trade.<\/p>\n

Today is likely to be a wild day in the stock market. Gamblers who bet on the right direction will profit. Gamblers who bet wrong will lose.<\/p>\n

But most traders are better off avoiding the casino – for today.<\/p>\n

Best regards and good trading,<\/p>\n\n\n
\"signature\"<\/td>\n<\/tr>\n<\/table>\n

Jeff Clark<\/p>\n

<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

In today’s mailbag, a Jeff Clark Trader<\/a><\/em> member shares his thoughts on Jeff’s recent essay on gold<\/a>…<\/p>\n

\n

I see the price of gold reaching new heights as confidence in the dollar wanes. And when markets are down, historically there’s a tendency to buy gold as a safe haven.<\/p>\n

– Derek G.<\/strong><\/p>\n<\/blockquote>\n

Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Most traders are better off avoiding the casino\u2026<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-20441","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_content_changed_during_generation":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20441","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=20441"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20441\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=20441"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=20441"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=20441"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=20441"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=20441"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=20441"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=20441"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}