Market News 9-14-23

The S&P 500 continues to frustrate the bears as it consolidates into a multi-month “pennant.”

These patterns show a volatile chart that grinds its way to tiger and tighter price action until it reaches a point when a massive move unfolds.

Economic data didn’t exactly come in fantastic. The market appears to be saying “give me something more substantial, expectation shattering,” and then I’ll pick a direction.

Such an interesting moment. You can almost feel the tipping point coming. And this gives us three important lessons: pay attention – don’t predict, risk and think long-term.

1. Pay Attention: Sure the market “should” be going down. But it’s not, for the last four weeks. It’s infinitely easier and more profitable to pay attention instead of predicting where it will go.
   
   
2. Risk: Initial position size is critical. Without directional volatility you are going to get bounced back and forth and play whack-a-mole with your emotions. Too much risk on initial positions without an obvious bias shakes you out of every trade. 
   
   
3. Think Long-Term: Stop thinking you need to make money every day, every trade. Sometimes it’s just plain smarter to manage capital, than risk it. Small losses on good ideas, with the right position size (current market) is strategic thinking. And that keeps you in the game in a tough market, which makes it easier to be net profitable when the market picks a direction.