The market is moving up and down but one good thing that happened today – extremely good price action in cyclical and small-cap stocks.
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Daily Dose
Cheap and Volatile market
“Profitable small caps are dirt cheap” ~ One analyst.
Once upon a time, the market was extremely expensive but very easy to trade and invest in. Now a big part of the market is cheap but very volatile. Trading has become a nightmare and no matter what you buy, the stock just in a few days loses everything. Large-cap stocks are moving like penny stocks making a violent move. In this kind of market, here are a few interesting price action stories to watch out for.
Strong Jobs Data but Same Price Action
The market keeps changing all the time. The talking points change and as a trader, you should always assess how the market is, what’s working and what’s not, and how you should fine-tune your strategy. Here are some case studies to help you understand changing landscape.
Following the Fundamentals: Where is the Strength?
There has been a very strong oversold bounce that has happened over the last week but the problem with such bounces is that you don’t know when to buy/sell. The Price Action is just all over the place. What can we do – Focus on stocks making new highs or making a Gap up move due to strong fundamental reasons and observe their price action behavior over time to understand whether such trades work or not.
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Price Action Stories – The New script
There comes a time when everybody is confused. Buy the dips don’t work. Trading becomes punishment, and slowly traders lose interest. But if one has to be in the game for a long time, one should never lose the feel of the market. Switch to paper trading. Try understanding what’s going on and once you get the feeling that things are working, make a comeback. The market rewards survivors. One of the objectives of writing these price action stories is to keep you all engaged even when things look extremely tough.
Chart Stories 27/Jan/2021
“We don’t care about ‘why’. Real traders only have the time and interest to care about ‘what’ and ‘when’ and ‘if’ and ‘then’.
Some interesting price action analysis
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The Wild ride continues
S&P 500 is down 2.0% as the market awaits the US Central Bank policy decision tomorrow. The market expectation is that it will signal a rate hike in March. As the market continues to swing wildly, the IMF has downgraded the global economic growth outlook due to inflation and Omicron. It now projects that global GDP will grow by 4.4% this year – 0.5 percentage points lower than its October estimate.
Fear and Panic as rates and Oil surge
Don’t shy away from losses. Just make sure they’re small. This way, you can stay in the game, learn, and grow more skillful.
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Reading Price Action: State of Ultra Large Cap
Here’s how the Ultra Large Cap [Top 200 stocks by market cap] stocks are doing in 2022. It gives you deep insight into how the market is positioning for the future
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Inflationary Chaos Tech trouble
Here are the market observations for today