by Ian Harvey
June 26, 2018
As pointed out by a top trade adviser to President Donald Trump, Peter Navarro, saying that the sell-off was a "large overreaction," as there is currently no plan to implement investment restrictions right now against China and other countries.
This is just another Trump play – “the ‘Art of the Deal’ with China,” – which has caused the markets to once again to over-react as nothing is immediate in the pipeline!
Many traders and investors, alike, are caught up in a case of widespread pessimism which leads to a scenario of sell first and ask questions later, which may be detrimental to moving forward profitably.
This selling hysteria is certainly hard to ignore as technicians panicked when the Dow Jones Industrial Average broke through the 200-day moving average in Monday’s losing session.
But, in fact, stepping back and scrutinizing the situation sensibly, this break is actually a sign to buy!
Over the years technical analysts have considered the major trend to be down whenever the market breaks below its average level of the previous 200 trading sessions.
However, not so long back; in early February this year, the 200-day moving average was broken to the downside.
But, in the wake of that break, the market rallied strongly.
And this is in fact a positive situation, as the Dow has performed slightly better after a 200-day moving average sell signal in the past 25 years, than it has on average following all other days.
What to do Now……
Looking at the information above, it would appear that you would have made more money over the last 25 years by treating the breaking of the 200-day moving average as a reason to increase stock exposure rather than reduce it.
There is no guarantee that the worst is over, or that the market will rebound, as there could be other areas of concern that could upset the balance……but putting an action plan in place would certainly alleviate some of the panic that has already been experienced.
One way to do this is see what Stock Options Made Easy is advising their members to do!
There are currently four types of membership to help you through the muddy waters….
3. " Mentorship", and
4. "Earnings Predictions",
Make the most of the trading situation!
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