Image Source: Unsplash

Ok, so I’ve now mentioned for about a month how market conditions have been ‘sub-optimal’.

And while there have still been opportunities to nibble at P1 targets (first profit target), these kinds of conditions will often ‘pop’ due to some unforeseen catalyst. In this case the Crowdstrike/Microsoft meltdown.

In our private group chats one veteran trader mentioned the challenge of being a lion (as opposed to a headless chicken). But this is very much part of our playbook.

Also, take Chloe’s example – remember she’s a 17x account trader, so it’s worth listening to her! Chloe pauses if she makes three consecutive losses. Yes, that happens even to her! And she’s 17x’d her account … And I should add, without taking P2s and without compounding her winnings. If she had, she’d be at about 100x.

So, please take this guidance to be cautious when the markets aren’t quite right.

In recent weeks that’s included overbought indices, whippy market conditions, false breakouts, etc.

At the same time, stay true to the method and you’ll find some absolute peaches … even like the DIA mentioned two weeks ago. A rise of 4% from a plum Big Money Footprints setup returned 40% from conservative deep ITM calls expiring in January!

You don’t need many of those – with solid stocks/ETFs to make a real difference.

And while each each I’ll go through many setups with you, much of that is to help train your eye and give you the practice of seeing these wonderful Big Money Footprints unfold.

So, commit to being the lion! Don’t become a headless chicken just because you missed a setup. Plenty will come. You can – and must – be patient.

See below for Market Outlook.

Market Outlook:

Watch the video for more detail.

What’s interesting about the Crowdstrike outage on Friday is that the markets were already retreating from overbought levels in the preceding days.

I’ve mentioned likely sector rotation over the past few weeks and that seems to be another interesting call, which is likely to continue. The market’s addiction to the tech megacaps is likely to be tempered in the medium term as Friday’s incident showed systemic vulnerabilities that will need to be addressed in two ways:

• More robust protocols – which cost money
• More regulation and potentially a friendlier environment for more competition.

Make no mistake, there will be a postmortem on this event, and if the world has got its hat on straight, significant protective measures will have to happen. You cannot be apathetic about large exposures to systemic failures that can affect international trade/travel/defence/healthcare/education, etc.

So, the market/sector rotation that I have mentioned for a while, is likely to continue.

Also, I mentioned last week that earnings – while likely to have a positive bias – would be a mixed bag. Certainly the latter is looking correct. There’s still a while to go for the rest of this earnings cycle.

Finally, as I’ve mentioned over and over again during the last few weeks, quality has been in short supply, giving us fewer setups to focus on. 

Our market timing is a real strength that few others possess. Being good at market timing enables you to swim WITH the tide. 

The Main Indices:

Last week I said this, verbatim:

“We now have a peculiar situation where all the main indices could be considered overbought! … Ultimately tricky conditions prevail, so be cautious and fussy … particularly with so much news being released in the coming weeks.  Be ready with the big guns for when there are friendlier conditions.”

That sounds quite prescient doesn’t it!

Stock Selection:

How cool are these most recent upgrades, saving us so much time to do our analysis!

Remember, quality beats quantity. Even with our amazing new technology, a chart still needs to have the right qualities in order for you to consider trading it.

Video Length: 00:42:40

More By This Author:

Four Stocks To Watch This Week - Tuesday, July 16
Individual Stocks Continue The Good, Bad And The Ugly
Four Stocks To Keep On Your Radar This Week