Stocks have seen a nice bid off the lows of April 7, but all of this volatility year-to-date has come from an attempted upheaval of the global trade order.
During the market rout, liquidity dried up. This is why we saw the sharp moves to the downside.
Eventually, there was some backpedaling on the tariffs from Trump, but I don’t think Fed Chair Powell helped the situation either.
Why is the Fed so behind the curve again? Has it really turned into a personal feud between Trump and Powell? Here’s what I think… (JUMP)
About that Free Market
One of the most dangerous things to do in markets is entertain fantasies that simply don’t exist. At the top of that list is the notion that if a true free market existed, our economic problems would disappear.
First and foremost, a true free market has never existed. There have always been attempts at market manipulation, both from governments and private entities. Is there any way around it? Unlikely, at least not from a historical standpoint.
But if we seek to understand markets through a natural lens, we can come to terms and accept it for what it really is.
Remember, nature isn’t exactly moral. Predators go after the weakest of the prey for food. I wouldn’t exactly call that “nice.”
And in many ways, markets work the same way - there are entities “hunting” for retail’s money.
So, how do we get around this? A solid combination of knowledge and wisdom.
In trading, knowing what NOT to do is often more important than knowing what to do. And these are the types of things I, and the rest of the Theo team, share with you on a daily basis.
One example is managing risk for things outside of your control. Another is understanding the accountability of one’s actions - you and only you are hitting those buy and sell orders.
With the information overload of modern markets, the quality of it is more important than the quantity of it. In a world of abundance, less is more.
I’ll be back on Monday updating you with the new sector performance rankings in the Tale of the Tape.
Gianni Di Poce
THEOTrade