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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:
Thursday was a good session for the S&P 500 with the index adding 0.4% and pushing back near record highs.
But that was then and this is now. In after-hours trade, the indexes are tumbling on continued Asian weakness and U.S. futures down more than half a percent.
Is this finally the start of the long-predicted stock crash? Bears are definitely dreaming about that tonight.
But if bears have been wrong all year, what are the chances they finally get it right this time? Ummmm, yeah…..
While there is an entire night for this situation to develop, I don’t put a lot of weight in overnight futures. This is an incredibly thin market and easily swayed by small and impulsive night owls. Big money trades during the day and they couldn’t care less about what a bunch of guys in their pajamas think.
Occasionally other parts of the world lead our market, but those episodes are few and far between. Our current bull market is fueled by a huge resurgence in the U.S. economy and what’s going on in the rest of the world doesn’t matter. In fact, things are so good here foreign investors are flooding into our markets because this is where the party is happening.
No doubt Asia and Europe still have their problems, but they are not a concern for U.S. investors. If these weak futures cause our indexes to gap lower Friday morning, that gives us an excellent entry point. Wait for the early bounce and buy with a stop under those initial lows. This is an easy, low-risk trade. If the selling resumes, no big deal, we get out and buy the next bounce.
HOOD got slammed on its first day of trading, but that usually happens to most over-hyped IPOs. Expect the selling to continue for a few weeks and even months. But this will eventually bottom like it always does. And that is when investors who believe in this stock should be taking advantage of those discounts. No doubt a good trade in this stock is coming, we just need to be patient and wait for it to come to us.
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By Jani Ziedins | End of Day Analysis
Free After-Hours Analysis:
Wednesday was another do-nothing session for the S&P 500.
As dramatic as last week felt, it didn’t change anything and we are still stuck in the dog days of summer. Big money is on vacation and they are the only ones with enough firepower to move markets in a meaningful and sustainable way. The rest of these summer peanut-shooters expend all of their capital in a matter of hours and is why price moves bounce back so quickly.
As I wrote previously, it’s been a very nice, nearly 5% run this summer and a sideways consolidation is long overdue. Expect the market to grind sideways into the fall and that is when things will get more interesting. But until then, keep expectations low.
And remember, sideways includes lots of up and down that doesn’t go anywhere. Avoid the temptation to read too much into any and every gyration because most will fizzle and reverse not long after they get started.
The only thing that would change my mind is a sustained move above 4,400 or a dip under 4,250. Until then, the next few weeks is nothing more than a boring grind sideways.
Bitcoin’s pop back to $40k resistance this week has been impressive. And just as meaningful is holding those gains the last few days. Unsustainable moves tend to retreat under their own weight fairly quickly and staying at these levels tells us the market believes in this price. That said, I would be quick to lock in profits if this retreats back under $40k. Above $40k, this is a buyable breakout. Under $40k, it is stuck in a $30k to $40k trading range and we want to be sellers at the top of the range.
Which is this? Smart traders follow the market’s lead and we will have our answer soon enough.
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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
Follow Jani on Twitter @crackedmarket
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