Averting Disaster, 18 May 2023

🖼 Daily Technical Picture 📈

➤ S&P500 moved higher to the top of the range. It has been consolidating since 18th April. Wyckoff enthusiasts will note that we may be approaching the latter stages (Phase C). If I were to use a plane analogy, the plane is taxiing towards the runway ready for lift-off. The issue is that we aren't told if we are heading North or South.

➤ Consolidations are tricky to trade, especially if it is narrow (distance between top and bottom of the range. We got caught out at the start of this range with a -1.5% losing trade (early May) and we've been "lucky" to have averted further loss (so far). Yesterday, a Short trade almost materialised. If that had triggered, we would be sitting on a -2.5% (unrealised) loss.

➤ Furthermore, we would have been chopped to pieces if other trades were triggered earlier in this consolidation phase. In that sense, Non-Trades are just as important as actual Trades. Although Non-trades will not make you a profit, it does prevent you from making a loss.

➤ I highlight all this because I take managing risks very seriously. My nickname is the Professional Loss Maker. I am an expert at handling losses. Afterall, you don't want Amateurs to be handling explosives. 💣

➤ Conclusion: 🐆 MrStocky the Non-Trader.

EQUITY TREND:

⦿ Short-term (weeks) - NEUTRAL
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN