All Posts by Jani Ziedins

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About the Author

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.

Dec 02

Why smart money is sticking with the October rebound

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

The S&P 500 tumbled -1.5% Friday morning after the monthly employment report beat expectations.

If this reflexive selling felt strange, you are not alone and the stock market spent all Friday rallying back from those opening levels, erasing virtually all of them by the close.

Apparently some investors still believe “good is bad”, but as we saw Friday, the majority of the market doesn’t agree.

Inflation is steering the Fed’s interest rate policy decisions and if the Fed can bring inflation down without crushing employment, all the better. This is the widely hoped-for “soft landing”. Is it possible? Maybe, maybe not, but with inflation headed in the right direction while employment remains robust, that suggests this Goldilocks scenario is still possible.

At this point, the market remains in a half-full mood and that means it is not buying the bearish interpretation of November’s better-than-expected employment. Until something changes, that means the path of least resistance remains higher.

If this market wanted to go down, there have been more than enough excuses to send prices tumbling. The simple fact we remain near multi-month highs tells us the ground under our feet is solid and Friday’s rebound confirms it.

Quite simply, if this market was truly fragile and vulnerable, it would have crashed by now.

Sometimes the hardest thing to do is to stick with a winning trade when everyone around us is telling us why we are wrong. But since we trade the market, not opinion, this counter-intuitive strength is far more important than what anyone else says. The simple fact prices keep going up when the crowd thinks it should be going down is our signal to stick with it.

We will run out of buyers at some point, but this is not that point.

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Nov 17

When is a loss bullish?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

Thursday was another wild session for the S&P 500. Overnight futures traders abandoned ship and sent the index tumbling at the open. But rather than join the dash for the exits, big money started buying those discounts and it was all uphill from there.

As I often remind readers, it’s not how we start but how we finish that matters most. And by that measure, Thursday’s 0.3% loss was actually a very bullish performance. Rather than join the selling, most owners shrugged and kept holding. That resilience is always a good sign. If this market was overbought and as fragile as the cynics claim, we would have opened low and kept falling. Instead, the selling stalled out of the gate and the index recovered almost all of those early losses by the close. For a down day, it doesn’t get much better than that.

The market loves to convince us we are wrong moments before proving us right. And now that we moved past the “convincing us we are wrong” part, it is time to get on with “proving us right”. As I said above, if this market was weak, we would be challenging the lows, not bouncing back toward the highs. 4,100 is still very much in the cards.

As for trading this morning’s weakness, if a person was tricked out by those early losses, there is nothing wrong with that. More important is we stay nimble and open-minded after getting out. Sometimes the next buying opportunity is only hours away. And today was one of those days. As easy as it is to get back in, we should never let ourselves get left behind if the market tricked us with one of these false alarms.

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Nov 16

Why this isn’t the top

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

The S&P 500 slipped 0.8% Wednesday, giving back all of Tuesday’s gains and leaving us stuck under 4k resistance for the fourth session in a row.

As I’ve written previously, it is not a surprise to see the October rebound stall at prior resistance levels as the cynics inevitably claim the index is too high and on the verge of collapsing. But one of the first things experienced traders tell new traders is, “Never try to pick tops.” That’s because what looks like a top is almost never the top. And I have a strong suspicion that this week’s “top” is nothing but another pause on our way higher.

Everyone knows markets move in waves, but that never stops people from calling every down day the start of the next big selloff. As much as I’d love to see prices rally every single day, everyone knows that’s not possible. So why overreact when we get one of those inevitable red sessions?

At this point, I don’t see anything out of the ordinary about Wednesday’s losses and this week’s struggles with 4k resistance. In fact, this price action actually looks constructive because across several days of testing the weekly lows, every single time supply dried up and prices bounced. That’s a characteristic of a strong market, not a weak one.

If this rebound was as fragile and overbought as the critics claim, we would be crashing back to the lows, not stubbornly hanging out near multi-month highs. Follow the market’s lead and ignore the noise.

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What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

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