Many are sitting on pins & needles, but I’m not. Here’s why

Before we get started: I’m running a little experiment this week. I’m making a YouTube video of the basic newsletter so you can watch it instead of reading it. It’s not a perfect 1 for 1 replica, but pretty close. Here’s the link for the video (it’s 6 minutes and includes content that’s normally locked away for Premium subscribers):

So, Friday we have a massive selloff in the markets.

The S&P dropped down to test the 50-day simple moving average.

This morning we’ve got a big whipsaw rally, heading back up the other way. Time will tell if this is the beginning of another bullish run or if it is some sort of “dead cat bounce.” 

Despite all of this, I remain calm.

Partly because I understand the seasonality of the markets and I expected some bearish action this month. I wouldn’t be surprised if the drop continues this week, but anything could happen.

I also remain calm because the trading system I use allows me to make money and not worry about the pullbacks. I don’t have to use my profits to outshine my losses, I just rarely book losses.

(note: I said rarely because there are very specific circumstances in which I am willing to accept losses on a stock as I explain inside my upcoming course.)

Anyway, buckle up for the week.

It’s always interesting in the markets.

I haven’t been bored yet — and I’ve been doing this trading thang for six years.

All right, on to the day’s headlines.

Trump comments suggest the US wants to keep up pressure on China but reassure spooked markets.

Yahoo Finance

Why it matters …

So, Friday was a page out of “The Art of the Deal” as the President made an audacious threat of 100% tariffs on Chinese goods if they stopped their minerals from being exported as they threatened. The market hasn’t quite learned this style yet and “freaked out” by dropping 2%-3%. Over the weekend both sides walked back the rhetoric some and we are looking at a green open.

There is probably more saber rattling to be heard in the coming weeks.

Comments:As mentioned above, the markets are starting out green today. We begin the Q3 earnings season this week so keep an eye on earnings reports for your sold Put positions. If possible, you want to give yourself a couple of weeks in case you need to roll to try to avoid holding through the minefield of earnings reports. This week is the monthly expiration of options so it tends to move lower on Friday.

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