The S&P 500 closed Friday up a very respectable 0.6%.
While a half percent gain is normally nothing to get excited about, this finish was actually a great outcome considering the index found itself in a -1% hole shortly after the open when investors got spooked by a run on another European bank.
Stubbornly high inflation, a tight labor market, the fastest rate hikes in a generation, and now a banking crisis. Sounds like a one-two-three-four punch and the market should be down and out for the count. But it looks like someone forgot to tell the market because it is nearly 500 points above the October lows.
As I’ve been writing for a while, this is a back-and-forth market and anyone trading the breakout or breakdown is getting killed by these reversals. As I wrote Thursday evening:
This is the kind of market where if you are not locking in worthwhile profits, you are left taking losses a few hours later. It really is that simple. Greedy bulls and bears are getting killed while savvy and opportunistic traders are printing money.
One day’s up is turning into the next day’s down. And now it looks like that time frame has been shrunken down to hours. Bears were right for a few minutes this morning, but if they held on much longer than that, they watched all of those profits go flying out the window.
And no doubt it will be the bulls’ turn next week when we hit our head on 4k resistance yet again. This is the kind of market where if you are not taking profits, you will be taking losses a few hours later.
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Jani Ziedins (pronounced Ya-nee) is a full-time investor and financial analyst that has successfully traded stocks and options for nearly three decades. He has an undergraduate engineering degree from the Colorado School of Mines and two graduate business degrees from the University of Colorado Denver. His prior professional experience includes engineering at Fortune 500 companies, small business consulting, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two children.