If you had money in the stock market Wednesday morning — and were paying attention — you likely questioned all of your decisions… And wondered how to trade the market sell-off.
Should I have sold?
Should I be buying?
Should I stay put?
Trust me, we’ve all been there.
But one thing I look to for answers is VOLUME.
When markets really correct — and, I mean, 20-30% or more — they do so on increasing VOLUME.
And that VOLUME is sustained over time.
Just look at the data from last year’s COVID-driven sell-off, as expressed through the Nasdaq 100.
That drawdown took the average VOLUME up to levels we’ve never seen.
But the drawdowns last September — and, yes, even this past February and March — failed to match that of last year.
And this one in particular — just 6.52% at its worst thus far — isn’t even close to the market corrections that preceded it…
On DECLINING VOLUME.
There are a lot of indications that the U.S. economy is going to slow down eventually when you look at the data.
But the key word here is EVENTUALLY.
That time is NOT right now, when nearly everyone is getting vaccinated, local economies are reopening, and folks everywhere are headed back to the office.
So while we know you might have felt the market Wednesday morning, keep in mind that we felt it right along with you.
But the discipline I’ve learned over the course of my career when it comes to how to trade a market sell-off — fundamental market analysis — gives me the ability to ignore my feelings and just look at the data.
And the data is showing me this…
Source: Seawolf Research
Total market volume is down 6% versus the past month’s average.
Crashes don’t happen on low volume.
So fade your feelings… And buy the d*** dip.
All the best,
P.S. WealthPress Senior Strategist Roger Scott just caught wind of fellow trading expert Chuck Hughes announcing the biggest project of his entire career: the Triple Threat challenge…
A chance for everyday traders to completely transform their lives over this summer…
He’s starting traders off with a special $50,000 challenge account… and equipping them with the tools necessary to bag the returns of a lifetime…
… And become a championship level trader on their own!