Its amazing, when the markets are falling everyone tunes into the financial news channels to hear what the so-called “experts” have to say. Last week, Goldman Sachs said the sky was falling and today they reversed their story saying the lows could now be in for the stock market. Other popular talking heads in the financial media were saying similar things last week, but now have reversed course.
This is what makes a market. Some people are bearish and others are bullish. So who wins?
Simple answer… it is the chart pattern that wins! You see, the charts tell us where the institutional money is flowing. The charts have been telling me since March 18th that markets were headed higher. So far so good, but that does not mean that the markets will go straight up in a straight line. There are always pullbacks and other patterns in stocks that will now be formed. This is probably one of the most important periods in history where you need to know how to read and understand a chart. Those who do have the opportunity to make tons of money.
This is also a time period where a trader or investor should also exercise patience. Traders must wait for these patterns to form on a chart before getting aggressive in a stock or sector and put all of the pieces of the puzzle together. This includes chart patterns, volume trends, retrace levels and many other charting factors. There will continue to be opportunities on both the long and short side of the market in 2020. Remember, it’s always about the chart pattern.
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