One of my mantras is to turn down the market noise and focus on the message of the markets. This is worth repeating often, but especially now because I keep hearing bad information spread in the media. Call it “fake news” if you’d like. Yes, that may seem harsh, but the headline, not the details, always seems to get the most attention.
Here’s the market noise that I’ve been hearing lately
- Some experts predicted that the markets would start falling if the 10-year bond rose above 2.6%. There is a technical reason here. If a 30-year old price channel is penetrated, a long-term trend would be broken. But would that really crush the markets?
- The recent rally was phony – yes, really. Go ahead and drop this in the “fake news” file.
- The recent rally is going to fail, so get out now while you can.
- The GDP is going to come down sharply. The Atlanta Fed’s model is looking at a slide for Q1 2017 of 1.3%, yet the New York Fed is saying 3.2%! Who is right here? (By the way, the Atlanta Fed’s forecast missed the mark badly for Q4 2016.)
- A hedge fund manager was on CNBC recently saying he was short bonds and long equities. He also asked, “How can anyone be short stocks right now?”
That is a lot of market noise to ignore!
When to listen
However, we are always looking for reliable information so we can make the best trading decisions. When do we pay attention to someone or something that may be a game changer?
That’s hard to determine of course, but reliability and confidence comes with previous success. Analyze the charts and technicals. Review your wins and the steps you took to get there. Decide what signals are most reliable for you. You’ll have a high probability road map to guide your trading.
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