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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.
By Jani Ziedins | End of Day Analysis
Free After-Hours Analysis:
The S&P 500 added 1.5% Friday as it powered to ten-month highs.
May’s employment report showed the most robust hiring in four months as employers continue shrugging off persistent inflation and high interest rates.
This was one of those half-full/half-empty moments for the stock market and it was all half-full on Friday as investors embraced the economic resilience and shrugged off the prospect of future rate hikes.
Will the stock market’s indifference to inflation and interest rates last? Probably not. That’s why smart money is already locking in some profits at these multi-month highs.
Ignore both the bulls and bears. Anyone positioning for a big directional move in either direction is simply not paying attention. This is a choppy, sideways market with a slight upward bias. Money is made trading against these swings, not betting on their contuation. Until further notice, dips are buyable and rips are sellable. And just as important, take profits early and often because anyone holding a few days too long will watch their winners turn into losers.
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Bears were right for a few hours this week during our brief “sell the news” moment, but anyone that didn’t collect those profits were left holding a pile of losses a day later.
And the same will apply to bulls pressing their bets at multi-month highs. We take profits when we have them because if we don’t, the market will steal them back a day or two later.
I still like this market and the slow grind higher will continue, but anyone pressing their luck near 4,300 hasn’t been paying attention. Lock in some very worthwhile profits (7.5% in a 3x ETF over the last two sessions) and then get ready for the next trade.
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By Jani Ziedins | End of Day Analysis
Free After-Hours Analysis:
The S&P 500 slipped 0.6% as Congress moves toward resolving the debt ceiling crisis.
This negotiated compromise finally lifts the clouds that have been hanging over stocks for weeks. But as I wrote last week, anyone waiting to buy stocks after a debt deal was reached would find themselves a day late and a dollar short. And I further warned readers on Monday:
Of course, now that we are 100 points higher, the risk/reward flipped against us. The easy profits are behind us and we are more vulnerable at the upper end of the recent range. This is the time to be taking profits, not chasing an imaginary breakout.
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Successful traders make money buying risk and selling safety. Last week was the time to buy the debt ceiling worry, and this week was the time to sell the debt ceiling relief. “Buy the rumor, sell the news” is as old as the stock market itself.
As for what comes next, ignore both the bulls and bears. We are not powering higher in a massive short squeeze the same way we are not tumbling back to the 2022 lows on a crumbling economy.
Anyone positioning for a big directional move in either direction is simply not paying attention. This is a choppy, sideways market with a slight upward bias. And now that we are falling into the slower summer months, this will only reinforce the market’s listlessness.
If every dip is going to bounce and every bounce is going to dip, money is made trading against these swings, not betting on their contuation. Until further notice, dips are buyable and rips are sellable.
And just as important, take profits early and often because anyone holding a few days too long will watch their winners turn into losers.
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If you find these posts useful, help me out by liking and sharing them!
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By Jani Ziedins | End of Day Analysis
Free After-Hours Analysis:
Our politicians finally did their jobs and reached an agreement to lift the debt ceiling. No one is happy about the proposed deal, but that’s why it’s called compromise.
And since the looming debt ceiling was the biggest worry hanging over the market, stocks finished Tuesday’s session…flat. Funny how that works.
But that doesn’t surprise readers of this blog. This lethargic reaction to good news happens so often it has become a market cliche: ” Buy the rumor, sell the news.”
Anyone waiting to buy the news of a debt deal is waaaay late to the party because all of the profits were collected last week when the outcome was far from certain. This is why I was telling readers to buy last week’s dip on Wednesday:
As for what comes next, expect the choppy, sideways trade to continue. We’re not going anywhere, but that won’t stop impulsive traders from jumping from one side of the boat to the other.
Until further notice, we keep trading against these swings. That means this week’s swoon is a buying opportunity.
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Of course, now that we are 100 points higher, the risk/reward flipped against us. The easy profits are behind us and we are more vulnerable at the upper end of the recent range.
This is the time to be taking profits, not chasing an imaginary breakout. Feel free to leave some money in the market, but make sure we lift our trailing stops to protect last week’s profits. And as always, taking some worthwhile profits proactively is never a mistake. Remember, we only make money when we sell our winners.
As for what comes next, this week’s break above 4,200 could trigger a short squeeze up to 4,300. That’s not the most likely outcome, but it is certainly a possibility. If prices rally on Wednesday, buy back what we sold on Tuesday and ride that wave higher. But most likely, not much will happen, and that means we waiting to buy the next dip under 4,200.
It makes no difference to me what happens next, only that my trading plan will be ready when the next profit opportunity comes along.
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If you find these posts useful, help me out by liking and sharing them!
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What’s a good trade worth to you?
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For less than $1/day, receive actionable analysis and a trading plan every day during market hours
Follow Jani on Twitter @crackedmarket
By Jani Ziedins | End of Day Analysis
Free After-Hours Analysis:
The S&P 500 popped 1.3% Friday, extending Thursday’s gains and the index closed at the highest levels in nine months. Not bad for a market that was in freefall three days ago.
This late-week rebound shouldn’t surprise readers of this blog. I warned bears on Wednesday to protect those mid-week profits:
Until further notice, we keep trading against these swings. That means this week’s swoon is a buying opportunity…[J]ust like how bulls got stung this week, bears pressing their shorts are making the same mistake. This is the kind of market where if we’re not taking profits, we will be taking losses a few days later.
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And wouldn’t you know it, here we are two sessions later and greedy bears let those nice profits turn into painful losses.
This game isn’t hard to figure out once we recognize the patterns. This is not a directional market, it is a choppy, sideways one. Anyone betting on the breakout or breakdown is getting chewed up and spit out a few sessions later when the market reverses.
People who claim this market is fixed are just telling the rest of us they have no idea what they are doing. It is obvious this is a choppy, sideways market and it is no one’s fault but our own if we are letting a bearish or bullish bias wreck our trades.
That said, there is an upward drift to this sideways, choppy trade. The gains are bigger than losses and that drift will continue next week. I will still be taking profits following big moves, but I’m riding this up wave a little longer.
Buy low, sell high, and repeat as many times as the market lets us.
Sign up for my FREE email alerts so you don’t miss the market’s next big move
If you find these posts useful, help me out by liking and sharing them!
Sign up for FREE Email Alerts to get profitable insights like these delivered to your inbox every evening.
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
Follow Jani on Twitter @crackedmarket
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