11/9/2025 - A number of traders have asked me lately why they are struggling in their trading.  When many traders are struggling, there's a good chance that they haven't developed psychological issues with their trading all at once.  Rather, something in markets has changed and they are struggling to adapt.

Since the end of October, the SPX has dropped almost 2%.  During that same time, the percentage of stocks above their 20-day moving averages has risen meaningfully for energy stocks, financial stocks, healthcare stocks, real estate stocks, and utilities stocks.  In other words, there has been sector rotation away from the strongest names and into the parts of the market that had been underperforming.  Just look at the last five trading days in XLK (technology) and XLC (communications), for example, compared with the past week in XLE (energy) and XLF (financials).  Airline stocks during this period of airport turmoil?  They're up on the week.

There's a very important lesson here.  When your trading performance declines, you need to do the same thing that you do when your car engine begins making loud noises. You look under the hood. Something has changed and needs to be addressed.  The market story is occurring across multiple charts and multiple time frames.  Becoming locked in particular charts, time frames, and views is a failure to adapt.

The best traders always approach the market with fresh eyes and often that leads to fresh ideas and trades.

11/7/2025 - The largest market participants are very concerned with value.  When a stock or other asset moves higher or lower on elevated volume, it's generally a clear sign that institutions are revaluing that asset.  The traders I work with spend a good deal of time scanning news and talking with informed participants to see if the emerging story might have legs.  Where the beginning trader might get down because they "missed" the move, the informed trader recognizes that a breakout in volume and volatility that takes us to a new price level could be the start of opportunity.  This is particularly the case when the move on elevated volume is occurring in a specific sector ETF, such as consumer discretionary stocks (XLY).  Such moves often flag sector rotation among large money managers.  Rarely is such rotation a one-and-done phenomenon.  When institutions engage in a broad rotation, it's a sign that they're seeing strength in one part of the economy and weakness in other parts.  An oversold sector that does not show subsequent buying interest is telling a story.  A sector that moves higher on elevated volume and barely corrects is also telling a story.  As in chess, we succeed by entering the mindset of those we're playing against.  We don't want to become so focused on our own psychology that we miss what's happening on the chess board.

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