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- Good News Ruined Everything 😠
Good News Ruined Everything 😠
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For the 10th January 2025:
Good News Ruined Everything 😠
Copy Politician's Trades 🏛️
How To Invest Like Warren Buffett 🧠
Good News Ruined Everything 😠
Ouch. That was a tough Friday.
Futures trading is not for the faint of heart
December jobs report came in hot. Jobs are booming, the economy is resilient…. so US stocks took a dive.
Welcome to the world of “Good News is Bad News”.
Hot Jobs & Cold Stocks👷
December saw the fastest job growth since March. Industries across the board had gains.
That’s a great thing, right? Well, it depends who you ask.
Under normal circumstances traders would be popping champagne on these kinds of headlines. But there’s one problem that just won’t go away.
A strong economy = inflation worries = Fed rate hikes.
That’s the kind of equation the stock market hates.
Higher rates mean less growth. Stock’s like our AI darlings will have to put a dampener on their expansion plans or take on more expensive debt to do it.
Not ideal.
The Secret Villain
There’s a bigger villain than inflation for stocks.
Rising Treasury yields. 😲
What’s a treasury yield?
It’s the return you get for lending money to the US Government from buying their bonds. An interest rate from the government.
Now why is that a problem for stocks?
10 year treasury yields have been on a steady incline
Well, the 10 year treasury yield jump to 4.79% on Friday. The highest it’s been since late 2023. And it’s been creeping up for months.
If you can get a guaranteed interest rate of 4.79% from something as reliable as the US Government (save the jokes) why would you take on the risk of the stock market for an extra few %?
Most investors need a pretty compelling reason. That’s why money’s running to these bonds.
Why are yields spiking? A few reasons:
Bond Vigilantes: Fancy term for investors dumping bonds to protest the government’s spending habits.
Inflation Anxiety: A strong economy could make inflation even stickier.
Global Drama: Yields are climbing in Europe & Japan, too. China’s the only one keeping things flat.
What Does This Mean for You?🔮
The S&P 500 is down almost 1% for January. Friday’s drop was the biggest since mid-December. The Nasdaq & Dow are telling the same sad story. The market’s freaking out because they’re worried the Fed might not be done with rate hikes.
I think it’s a gross over reaction. This is a perfect time to practice the “buy the dip” strategy.
So much so I’ve been focusing on Nasdaq futures for 20x leverage & buying the dips. Average profit have been just under 50%. Here’s how it’s been working out…
My closed positions for Nasdaq futures
I’ve done exactly the same on this recent drop. It’s not such a pretty sight right now but once everyone chills out a little I’m confident we’ll be back to recent highs. That’ll net me 100%+ on my current open positions.
Open positions aren’t as pretty but I’ve got more orders ready if price continues moving down.
🎯 Here’s My Game Plan:
Brace for Bumps: The road ahead might get rocky. Rising bond yields + stubborn inflation = potential turbulence. As long as you know that, you’ll learn to love the red days like me. I just see it as extra gains.
Watch Those Earnings: Earnings season is here. It could be the boost we need to get things moving in the right direction. Strong profits will stop investors sulking about interest rates not getting cut as fast as they’d like. Speaking of…
Inflation Is King: Next week’s inflation data is the thing to watch. If it cools, expect a rally. You heard it here first. If it doesn’t… I’ll make sure I’ve some cash to hand.
Stay sharp, keep some cash ready & don’t let the market mood swings shake you out of your game.
Market wide red days are the best times to average down on your index positions.
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