Chart Of The Day: Beware Of FOMO
Image Source: Unsplash
So what is FOMO???? It's the Fear Of Missing Out. Should you be anxious about the Markets? Of course, you should.
Right now there is lots and lots of uncertainty. Political uncertainty, Interest uncertainty, Earnings uncertainty, Unemployment uncertainty. The list goes on and on.
Uncertainty breeds fear and fear should not drive your investment decisions. I'm a channel flipper and I go from Bloomberg to Fox Business to CNBC and back all over again and what do I hear. All the talking heads are coming to different conclusions and in my view most of those conclusions are just wild and irrational guesses.
Barchart is giving you the hard facts Data you can rely on, You have a plan and you have stop losses and diversification to help you mitigate the Market risk.
Again I want to look at Vanguards Total Market ETF (VTI) which holds almost 3,700 stocks. I want you to look not only at the price momentum vs. the various daily moving averages but also the bottom of the chart to see the volume and direction of that volume.
(Click on image to enlarge)
VTI Price vs Daily Moving Averages
You will notice that in the last 5 days volume has increased and in 4 of the last 5 days the direction of the volume has been down. What does that tell you? In the last 5 days sellers have out numbered buyers. My plan is to keep my stop losses in place. A couple have triggered but most haven't. I will keep my powder dry and when I start to see increased volume and more buyers than sellers I will start to buy back in.
For those of you that need additional data let's look at the Barchart Performance Indicator:
Market Performance Indicator
Barchart Market Momentum Index (BCMM) [-2.26%] is an exclusive index used as an indicator of change in overall markets. It reflects the movement of stocks that fit the following criteria: must have current SEC filings, must have traded for a minimum of 6-months, and must be trading above $2.
Market Average
The percentage of stocks in BCMM above their individual Moving Average per period.
| 5-Day MA | 20-Day MA | 50-Day MA | 100-Day MA | 150-Day MA | 200-Day MA | |
|---|---|---|---|---|---|---|
| Today | 18.79% | 17.69% | 36.60% | 40.00% | 42.69% | 48.10% |
| Yesterday | 13.94% | 20.67% | 39.54% | 43.50% | 45.58% | 50.37% |
| Last Week | 61.02% | 67.65% | 70.24% | 65.74% | 64.37% | 67.43% |
| Last Month | 61.85% | 56.21% | 45.73% | 47.15% | 48.50% | 54.55% |
I will closely monitor the 5, 20 and 50-day Moving Averages and when they approach 50% that will give me additional comfort that I see the correction is over.
Please be rational and stick to your plan, Do not be a victim of FOMO and let fear drive you to irrational decisions. Have some faith in your plan.
More By This Author:
Chart Of The Day: Mama Said There'll Be Days Like This
Chart Of The Day: Kadant - 18 Advances In The Last 20 Trading Sessions
Chart Of The Day: Commvault - Skyrockets On 17% Year Over Year Revenue Growth
Disclosure: On the date of publication, Jim Van Meerten had a position in: more
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