Hey friend,
We got the latest retail sales data and some new consumer sentiment data this morning.
Both figures underperformed expectations – with retail sales in particular showing a decline instead of the expected increase.
Let’s see how the market has been moving.
The Daily Direction
Note: All indexes closed higher yesterday. And while they generally opened higher this morning, they have been moving lower through the day. Still, no change in any index directions – which all remain upward.
The Daily Nugget
Don’t let pessimists set your default.
Pessimism sounds smart in the market.
There’s always a convincing reason stocks should fall.
Debt is too high.
Valuations are stretched.
The economy is slowing.
Politics are a mess.
Some of those warnings will eventually be right.
The problem comes when you start treating the pessimist’s view as your default.
Over long stretches of time, stocks have generally moved higher.
So a trader who is permanently looking for the next collapse starts every decision with a built-in handicap.
A normal pullback becomes the start of a crash.
A strong rally becomes “irrational.”
New highs become a reason to get nervous instead of evidence that buyers are still in control.
And while the pessimist waits to be proven right, the market can keep climbing for months or years.
That doesn’t mean you ignore risk.
It means you make the market prove the bearish case before you trade like it’s already true.
Watch price.
Watch breadth.
Watch whether support is holding.
If those things start breaking down, adjust.
But don’t sell a healthy market because somebody has a great explanation for why it ought to fall.
There will always be people predicting the next disaster.
Eventually, one of them will be right.
You don’t have to pay for all the wrong calls in between.
The Traders Agency Team
P.S. Don’t forget that every Monday at 9 a.m. Eastern, Head Trader Ross Givens goes LIVE on his YouTube channel to break down the markets in real time and highlight overlooked opportunities.
It’s completely free so make sure you don’t miss the next one.
Use this link to join next Monday at 9 a.m. ET.
Have a good weekend.
