Market News 9-22-23

The Market 📈

An important lesson in the markets today and it’s something called price discovery. 

To put it more specifically, professional traders will be watching to see if stock market bulls come and defend the price they’ve held the last three times, which in this case looks like 432 in the S&P 500.

All day everyday in the stock market there’s a dance going on whether we realize it or not with bulls and the bears duking it out. Testing each other to see who can push it through each level and who defends a price with all that might and money.

Jim Cramer gives his six reasons on why the stock market is going down and investors are selling positions. I definitely don’t agree with number three on his list. Check it out and see what you think.

The other side of the argument, the bullish side has a little more flavor to it.  something many people don’t realize is there’s plenty of opportunity to buy stocks even if the market is going down. 

The core concept of our New York Method Focuses on a sector rotation strategy which basically means that we’ve been in a bull market for well over 12 months. Because we’re simply following the order flow in and out of the right stocks at the right time.

If you need some proof, bullish investors are arguing that this hot sector is relatively cheap from a P/E perspective. I can tell you it is the top sector we’re trading right now as well.

FOMC LANGUAGE

When the Federal Open Market Committee (FOMC) is described as hawkish or dovish, it refers to their monetary policy stance

Here are some key points to understand:

– **Hawkish**: A hawkish monetary policy is one that prioritizes controlling inflation over maximizing employment.

This means that the FOMC may consider raising interest rates to control pricing and fight inflation, even if it means sacrificing economic growth. 

Hawks are willing to allow interest rates to rise to keep inflation under control. They are described as more aggressive in nature, whether in terms of monetary policy or military stance during a potential conflict.

– **Dovish**: A dovish monetary policy is one that prioritizes economic growth and employment over controlling inflation. This means that the FOMC may keep interest rates low to stimulate spending in the economy, even if it means risking higher inflation. 

Doves are described as more meek or conservative in their approach.

It’s important to note that the FOMC’s stance can shift depending on the state of the U.S. economy. The current FOMC includes members who have been identified as hawkish, dovish, and neutral, which can make it difficult to predict their next move.

Stock Market Wisdom: Get Profitable Quicker. 

  • The big question is how to make more when the market is good while losing less when it’s frustrating.

  • Discusses a coaching session about optimal trade size based on market conditions. Avoid having the same size position and risk for every trade. When conditions are ideal, increase size to maximize returns. When choppy, reduce size to preserve capital.

  • Assess market conditions to determine if reward potential is high enough to accept risk. If not, wait for better opportunities. Stop wanting each trade to make money – focus on overall edge and sample size.

  • Research and conviction come from assessing order flow and tape reading before trading. This avoids hesitation in taking trades. Trust your system over time.

  • Use your knowledge – if you plan for easy profits and the market cooperates, take advantage. If you expect choppiness, protect capital. Follow your plan.

  • The majority of profits often come from a smaller subset of trades. Recognize optimal situations, increase size in those, take quicker profits when conditions are worse. Patience is key.

  • Don’t get frustrated when markets aren’t trending. Ask why you didn’t make more when conditions were better. Run trading like a business – maximize profits in good conditions, reduce risk in bad.
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