{"id":8972,"date":"2018-03-22T07:30:14","date_gmt":"2018-03-22T11:30:14","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=8972"},"modified":"2018-03-22T07:30:14","modified_gmt":"2018-03-22T11:30:14","slug":"youll-go-broke-doing-this","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/youll-go-broke-doing-this\/","title":{"rendered":"You\u2019ll Go Broke Doing This\u2026"},"content":{"rendered":"

Five minutes into the trading day on Monday, it was obvious my trading plan for the week<\/a> wasn\u2019t going to play out.<\/p>\n

I was looking for the S&P 500 to rally up towards the 2800 level earlier this week, and I was planning to use that rally as an opportunity to establish short positions in anticipation of a move back down towards the February lows.<\/p>\n

We didn\u2019t get that rally. Instead, stocks gapped lower and they continued to decline throughout the session. By the end of the day, the S&P 500 had lost 40 points. And my trading plan for the week was rendered useless.<\/p>\n

But\u2026 and this is the critical point for traders to understand\u2026 the adverse move didn\u2019t cost us any money. At least, it shouldn\u2019t have.<\/p>\n

I was looking to short stocks as the S&P approached 2800. But it didn\u2019t happen. So, there was no trade.<\/p>\n

But I heard from a couple of readers who were angry because they lost money as a result of Monday\u2019s essay. Apparently, they bought stocks early on Monday in anticipation of the S&P 500 rallying towards 2800.<\/p>\n

Of course, nowhere in Monday\u2019s essay did I even suggest, let alone recommend, buying stocks in anticipation of a rally. My plan was to short stocks on a rally \u2013 which did not happen. But, in this current environment \u2013 where the S&P 500 can move as much as 45 points in a day \u2013 lots of folks feel a compelling urge to try to capitalize on every move. So they interpreted my comments as a reason to take a bullish position.<\/p>\n

I\u2019m telling you this as respectfully and as humbly as I possibly can, but also with absolute, 100% confidence\u2026 If you try to trade every move in the market, you will eventually go broke.<\/p>\n

Successful trading involves waiting for the odds of a trade to be in your favor before you take it. For me, in general that means waiting for the S&P 500 to hit support or resistance levels and for the technical indicators I follow to be in oversold or overbought condition when that happens.<\/p>\n

On Friday, the S&P 500 closed at 2752 \u2013 right on the support of its 50-day moving average<\/a>, 9-day exponential moving average<\/a>, and the support line of the rising wedge pattern.<\/p>\n

But most of the technical indicators I follow were in neutral territory. So, while I suspected the market might bounce off of support, I wasn\u2019t going to bet on that outcome since \u2013 without oversold conditions \u2013 the odds of a bounce were about even.<\/p>\n

The S&P 500 closed at 2712 yesterday. That\u2019s down 40 points for the week \u2013 which is a loss of 1.5%. If you bet on a rally, then yes, you lost money. And if you used options to bet on a drop, then you probably lost money too, since the decline hasn\u2019t been enough to overcome the time decay of the past four days.<\/p>\n

So, the market is doing exactly what it does best. It is frustrating the heck out of most of its participants.<\/p>\n

I get emails every day from folks asking, \u201cWhy aren\u2019t you recommending more trades in this volatile environment?\u201d<\/p>\n

Keep in mind \u2013 I\u2019m getting these emails even though we\u2019re only 12 weeks into 2018 and I\u2019ve already made 20 trade recommendations. And the vast majority of those trades (83%) have been profitable.<\/p>\n

But I get it. When the market is moving all over the place, folks feel like they\u2019re missing out on profits if they\u2019re not trading every move.<\/p>\n

The truth is\u2026 by not trading every possible move, you\u2019re likely saving yourself from losses.<\/p>\n

The only way I know for sure how to profit on the broad stock market in volatile times is to wait to buy the S&P as it tests support while the technical conditions are oversold, or wait to sell the S&P as it hits resistance and the technical conditions are overbought.<\/p>\n

It doesn\u2019t happen often \u2013 maybe only once or twice each month. But those conditions almost always present a profitable trading opportunity.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

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

Things have really ratcheted up in the mailbag this week. And considering the previous volume, we didn\u2019t even think that was possible\u2026<\/p>\n

Jeff, I think you are doing a great job, please keep up all your great work! You are honest and you care about people, no one can ask for more than that! Thank you so much for all your help in understanding markets, you are great.<\/p>\n

\u2013 Dina <\/strong><\/p>\n<\/blockquote>\n

 <\/p>\n

I\u2019ve been reading your articles for so many years. Doesn’t matter where you move to. Thank you.<\/p>\n

\u2013 Sukhdev <\/strong><\/p>\n<\/blockquote>\n

 <\/p>\n

Jeff, I’ve been reading your daily Market Minute<\/em> for a few months, and I have been impressed. Frankly, you seem to be really good.\u00a0 An excellent trader. I’m strongly considering signing up for your Delta Report<\/em>. Where would you think gold will be, say, by the end of the year? Could you give us your best guess? Approximately? Thanks.<\/p>\n

\u2013 William <\/strong><\/p>\n<\/blockquote>\n

 <\/p>\n

This is a pattern you probably have noticed, at least for this year, other than Feb 2, every Friday has been an UP day. I speculate that feds watch the stock markets from Monday to Thursday, knowing many folks use weekly closing price for their TA. On Friday, when there\u2019s no Treasury auction, feds deposit money into primary dealers\u2019 account and instruct them to buy stocks. Except for 2 weeks ago, that maneuver manages to push S&P 500 over 50-day moving average on almost all Fridays so far.<\/p>\n

\u2013 Stephen <\/strong><\/p>\n<\/blockquote>\n

 <\/p>\n

Hi Jeff. I was a subscriber when you were at your previous publisher, and was disappointed when you left.\u00a0 When I came across your Delta Direct<\/em> in November of 2017, I immediately signed on for life. My success rate with your recommendations is 13 of 14 in less than 4 months. With an average outlay of about $6,000 on stock trades and about $500 on each options trade, I’ve recouped half my lifetime membership cost. I so look forward to having you on my side when the bull market ends. Thanks.<\/p>\n

\u2013 John <\/strong><\/p>\n<\/blockquote>\n

 <\/p>\n

Just a quick note to let you know how much I appreciate what you do and how much I\u2019ve learned from you over the past few years. I was already familiar with technical analysis when I subscribed to your service. However, you have helped me to take that analysis to the next level and I feel much more confident in my market and stock analysis as a result.<\/p>\n

I have decided not to renew my subscription as I cannot justify any additional capital expenditures for trading services. I cannot keep up with my current subscriptions as there is just too much material for me to read in a timely fashion. Thank you for all that you\u2019ve taught me and I wish you the best in all of your future endeavors.<\/p>\n

\u2013 Mark <\/strong><\/p>\n<\/blockquote>\n

 <\/p>\n

Hi Jeff, I’ve been a subscriber since you were with your previous publisher and find your service exactly what I was looking for as an addendum to my investment needs. Having grown up in a free market (Capitalist) system, I prefer the way your advice is dispensed; that is, in a manner which offers your best advice supported by appropriate rationale so that “I” can decide whether or not to pursue a particular recommendation.<\/p>\n

I would guess that some of your subscribers are younger well-heeled and well-educated people which are somewhat impatient and ready for their gratification \u2013 right now!<\/p>\n

You’ve done an excellent job of laying out your track record with appropriate illumination of the annualized ROI. It’s up to me to decide whether or not I want to follow your advice which is exactly what I subscribed for. Even like the “Snowflakes,” I’m a little impatient in that at my age (76), I have less time to accumulate my fortunes than youngsters do and your trading vehicle provides me that opportunity with reasonable and measured risk exposure. Keep on keeping on.<\/p>\n

P.S. I like that you’re practicing good father principles by bringing your kids on board with you.<\/p>\n

\u2013 Carl <\/strong><\/p>\n<\/blockquote>\n

And some continued thoughts on last week\u2019s response piece, \u201cThis Comment Hit Me Hard<\/a>\u201d\u2026<\/p>\n

You took it well! Salute!<\/p>\n

\u2013 Jean <\/strong><\/p>\n<\/blockquote>\n

 <\/p>\n

Jeff, I have been an enthusiastic subscriber for years. I just don\u2019t have time during the day to follow the trends, stats, and nuances, so I value your advice. My finance profs at MIT in the early \u201880s included Fischer Black and Robert Merton. But alas, my education falls way short of your real-world experience. So I value what you say.<\/p>\n

That said, I have a suggestion: don\u2019t publish the complainers. If you do it publicly, it has the net appearance of being overly sensitive and detracts from the strength of your record. A quarterly piece on your trades is all you need. If we aren\u2019t following your advice, shame on us. That\u2019s all you need to say.<\/p>\n

For those knuckleheads that think anyone is able to win 100% of the time, they aren\u2019t worth the time to read their complaints. I would suggest that you send their money back. And publish another round of actual results to the folks that stick with you. You don\u2019t need the noise.<\/p>\n

The latest rant from Mark shows that he doesn\u2019t understand the nature of the markets and what value you bring. But hearing your rejoinder makes me feel that you may not be sure of yourself, or that you want the last word, neither of which dignifies your talent. Hang in there, us sensible investors respect what you do and honor your efforts.<\/p>\n

\u2013 Gary <\/strong><\/p>\n<\/blockquote>\n

 <\/p>\n

On the one hand you frequently say you “love” getting negative feedback. On the other hand, every time someone shares their frustration, you ridicule them, and include selected letters from your “mailbag” shilling for your service, and calling people “uneducated” that haven’t profited in lines with your claim.<\/p>\n

For example: today your mailbag includes a reader stating: “Some are too uneducated about trading in general to recognize sound advice.” And another writes in: “Tell Mark to put HIS money where his MOUTH is and increase his LOT size.” Sounds like the guy recommending bigger position size doesn’t understand bigger position is not a way to change loss into gain.<\/p>\n

Less shill, and more reality check, might increase your overall credibility, if credibility is important to you.<\/p>\n

\u2013 Alan<\/strong><\/p>\n<\/blockquote>\n

 <\/p>\n

Good morning Jeff, Just a quick note to let you that when I first read the complaint it seemed clear to me there was more than complaining going on. I liked your response, I thought it was very fair. Fairness in this corrupted-on-nearly-every-front world of today we live in is a real breath of fresh, pristine mountain air.<\/p>\n

Your writing has been on my radar screen for close to a year now and when I can afford your subscription and afford to take full advantage of it I will do so as one part of a non-job income-producing strategy I\u2019m slowly putting together. I for one honestly do appreciate at a real level the thought, care, and honesty you put into your work. Keep staying true to the truth.<\/p>\n

\u2013 David<\/strong><\/p>\n<\/blockquote>\n

 <\/p>\n

Thank to everyone for sending in your thoughts, questions, and stories. As always, keep them coming\u00a0right here<\/a>.<\/p>\n

ATTENTION INVESTORS<\/strong><\/h2>\n

We\u2019re looking for someone who eats, sleeps, and breathes micro-cap stocks…<\/p>\n

\u2026someone who combs the market for little-known companies with explosive potential\u2026<\/p>\n

\u2026someone with a deep network of contacts in a variety of industries\u2026<\/p>\n

\u2026someone with great investment ideas we\u2019ll never see on Bloomberg or in the Wall Street Journal<\/em>\u2026<\/p>\n

If that sounds like you, read on here<\/a>\u2026 you may have what it takes to join our team as a high-profile investment expert.<\/p>\n

Last Night’s Crypto Q&A<\/strong><\/h2>\n

Did you catch last night\u2019s live Q&A with cryptocurrency expert Teeka Tiwari?<\/p>\n

He answered readers\u2019 burning questions about what\u2019s next for this new asset class\u2026 what regulations mean for the space\u2026 and the best ways to take advantage of the recent correction.<\/p>\n

If you missed it, don\u2019t worry. Teeka\u2019s agreed to keep a replay of the Q&A online for a short time. So be sure to watch it right here before it goes offline<\/a>.<\/p>\n

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

Here\u2019s why you should never trade just for the sake of it.<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"closed","ping_status":"open","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-8972","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/8972","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\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=8972"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/8972\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=8972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=8972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=8972"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=8972"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=8972"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=8972"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=8972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}