The Gilmo Report

August 4, 2019

August 3, 2019

The market action this past week reinforced my general view of the current investing and trading environment. As I’ve said repeatedly, this remains a dangerous, volatile, and highly news-influenced market that can pull the rug out on investors in an instant. It can also suddenly reverse off its lows and rip the heads off of late short-sellers.

In addition, what the market does one day may not necessarily indicate what it will do the next. All of this is why we never chase strength on the upside or weakness on the downside. At the same time, I advise swing-traders to maintain an opportunistic, 360-degree trading posture. Intermediate-trend followers need not apply.

Again, the market has proven the utility of my approach. After Wednesday’s post-Fed sell-off, the market was rallying happily on Thursday when President Trump tweeted about moving forward with additional tariffs on China. That sent the NASDAQ Composite Index, which was up as much as 135.62 points, skidding 230.52 points to the downside before bouncing to close down -63.04 on the day.

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