Trade Aptitude

Results of Thursday’s Best S&P Futures Turning Points: The short at 5142.25 stopped out and the breakout buy at 5238.25 only offered a 5.50-point move before failing. 

Today’s Best S&P Futures Turning Points (consider wider stops and less size in fast moving markets): 

Buy 5113.75 stop 5109.25. Short 5155.00 stop 5159.00 if price drops below and retraces to entry. 

The World Index: (+100/-100) jumps from -44 to +6 with the world markets mixed within low volatility. 

Catalysts: Non-Farm Payrolls @ 8:30. 

Quick Tip: All-Time High

What is your plan? Stay long, hedge, go flat, or short? 

Evidence from an analysis of stock market returns since 1926 done by Schroders.com might help: 

1. Of the 1,176 months since January 1926, the market was at an all-time high in 354 of them, 30% of the time.

2. 12-month returns following an all-time high being hit have been better than at other times: 10.3% ahead of inflation compared with 8.6% when the market wasn’t at a high

3. $100 invested in the US stock market in January 1926 would be worth $85,008 at the end of 2023 in inflation-adjusted terms, growth of 7.1% a year. In contrast, a strategy which switched out of the market and into cash for the next month whenever the market hit an all-time high (and went back in again whenever it wasn’t at one) would only be worth $8,790. This is 90% lower!

With that in mind, I’ll add a fifth choice to the question. Buy more!

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Trade Fearlessly,

Mike Siewruk

P.S. Forward this blog to your trading buddies. Share in the wealth!