Stock Market Analysis: Rise and Fall

Bill Poulos is an American stock trader, financial educator, published author, and a former General Motors automotive executive. Bill authored a book titled, Bill Poulos’s Simple Options Trading For Beginners: How to trade options from A to Z explained in plain English. When he retired from General Motors in 2001, Bill and his son, Gregory Poulos, co-founded Profits Run, Inc., a financial publishing company. The company’s mission is to assist individuals in making educated investments with minimal risks. Profits Run accomplishes this by providing investment materials, software, online courses, and one-on-one coaching. The company has helped individuals in over 150 countries around the world with managing their wealth through investing. Bill and Profits Run have a passion for giving back to their community and do so through the Profits Run Starfish Award. Bill and his wife of 50 years, Karen, reside in Wixom, Michigan. Karen and Bill have 3 sons and 2 grandchildren. Below, Bill Poulos reviews the Stock Market for the week

This week we saw another volatile week in trading. There were strong moves up as well as strong moves down. While big moves don’t constitute an untradeable market, in and of itself, it does make it more difficult to have confidence in our trading. Untradeable volatility is when there is not a defined pattern to these moves. We know that big movement are fine if these moves are done in a deliberate fashion.

A deliberate trend is made up of price action making consistent cycles of highs and lows. We see a deliberate up trend develop when price action is making higher highs and higher lows. We see a deliberate downtrend develop when price action is making lower lows and lower highs. When we just see big moves that don’t develop into an up or down trend, we have untradeable and inconsistent price pattern that are non-deliberate. Our goal should be to identify trades that are setting up in a deliberate fashion that give us the highest probability for success.

The markets continue to rise, and fall based on what is happening in the news, both here in the US as well as internationally. The big news that continues to dominate is about the impeachment inquiry for President Trump, the military issues, the trade war with China and general concerns over the economy.

This upcoming week we have several news announcements coming out that can impact the volatility in the markets so make sure you are using good risk management in your trades. Much of the talk may be surrounding what the Fed is going to do with interest rates going forward. So, watch for some possible big moves when the Fed is speaking.

This week we are going to look at the chart of the SP-500:

Profits Run Presents S&P 500
Profits Run Presents S&P 500

On this weekly chart of the SP-500, we saw a continuation of the bearish movements we have seen over the past several weeks. This downward direction was broken on Friday as prices moved back up and out of the downward moving range, we have seen over most of the last month. Whether or not this continues will be determined by what is happening with the current affairs we discussed above. Positive news should stimulate the markets to continue moving higher while negative news is likely to push prices back down for more selling off. Because we don’t know what is going to happen, it is important to focus on identifying those trades that are most deliberate in their movements.

Remember, October can be a volatile month generally so make sure you are using proper money management which should keep you trading and out of trouble if you are following your rules.

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