The pundits and talking heads are getting louder as markets continue to drop. Traders and investors have feared this year would come, but don’t let your fears take over. One of the best ways to tamp down your fears is to tune out the media noise.
Easy money got us here
With the surge of liquidity into markets amid the economic uncertainties from a devastating pandemic, the Fed executed largesse over prudence. Without a timeline, that was the easy part.
Financial media circles did not complain when the money was flowing fast into equities. Heck, it was hard to find a bear who did not get run over by a bull stampede over the past two years.
But now that flow of money has come to a screeching halt. Inflation is here, and with it comes the consequences of an easy money Fed policy. Global economies are beginning to suffer, and the media noise is reaching a fever pitch.
Tune out the media noise
The financial media noise is loud, distracting, and sometimes obnoxious. It’s difficult to know who to listen to and when. I’m here to tell you (again) that the noise will lead you toward bad choices.
In the past week, how many times have you heard a talking head declare that the bear market has bottomed and it is safe to enter back into the waters? Endless times, and yet the indices continue to make lower highs and lower lows on the chart.
You can always find clues that support a case for a market bottom. The MACD is oversold, stochastics have fallen off the cliff, and relative strength is horrible. But what about price? Price is the king of indicators. Until it turns up and a new trend is confirmed, these arguments are worthless.
Stay away from/turn off the views of any talking head who refuses to listen to the market. They are just playing into fears and providing false hope. Focus on the charts and the indicators instead. If you can do that, you’ll find yourself in a much better place with more control over your trading than ever before.
