S&P 500 goes 9 days without a pullback - will it make 10?
Updated
It has been 9 days without a pullback. There was a really nice 8 day pattern (6 up, 2 down) that made for great swing trading. This new trading range has had me confused every day trying to figure out what is going on. Tech stocks were underperforming and down solidly at midday. Then out of the blue several stocks jumped 3%,5%,10+% to finish in the green almost across the board. My gut tells me it was a big short squeeze on all the tech stocks. The last 2 months the market has made a significant pull back on the last day of the month. Will we get one more day and then a correction or will this irrational, not stop rally keep going?
Note
The hardest part about these kind of rallies is the uncertanty (duh, I know). I don't want to be part of FOMO and risk a big loss (what seemed like my Boeing and Delta purchase right after the bottom), but I always keep the following quote in mind to balance out my inability to understand why the market goes up despite such a terrible outlook."Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” Peter Lynch
That Boeing stock is almost neutral and my Delta stock is now making money.
Common sense tells you the market should not go up so fast given the clear economic impact, but then I am reminded of another quote.
“markets can remain irrational a lot longer than you and I can remain solvent.” A. Gary Shilling
I know how much I failed to invest over the last 2 months, and if I just would been "braver" back then I would be up a lot more (buy that stock or buy more of it). I have been making some long entries (some up 20-30%) and swing trades (average 15%), but I missed out on a lot more. This idea a big correction is coming can paralyze your trades. I know it has for some of mine. For the long term, I think as long as you are buying "quality" stocks at a "discount" you will be just fine even if a big correction comes.
Good luck and happy trading!
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