There is Blood on the Streets and it's been there for quite some time!
This wasn’t entirely evident if you ONLY paid attention to the broader indexes.
Make no mistake, there was a big disconnect with what the major indexes were doing a few weeks ago versus what individual stocks were doing. Dating back to November, some might argue December; you had a large amount of individual stocks across the markets hitting 52-week lows, while the broader markets only showed a small retrace around the same time. But last month and especially today, it seems as though we are starting to see the Blood reflected across the board! Equally and without bias! The broader markets took a beating today and it continues to flirt with breaking long-term horizontal support (levels we haven’t seen since 2013/2014). If that wasn’t enough to show you that there is blood on the streets, Market leaders (FANG) got the ultimate smack down last week and the bloodshed spilled into today’s trading. Take a look at the bloodbath.
Facebook, at the time of this article, down over 15% off its high.
Amazon (down over 30%),
Netflix (40%) and Google (15%).
SO NOW WHAT?????
This is where my 8 years of formal education in Psychology will start to show! *puts on therapeutic hat*
We have absolute ownership, authorship, autonomy and simply put, a choice on perspective. For simplicity’s sake, let's narrow it down to two.
Blood on the streets can instill fear in us and we can do nothing!
Or we can reflect back, embrace it and act!
I choose the latter! Why?
Market corrections, bear markets, and pullbacks are all a part of the course. We aren’t in unchartered territory and this isn’t new. Therefore, we should stop acting like we haven't witnessed corrections along the way. We have!
What we can do IS BECOME PROACTIVE and NOT REACTIVE!
What does that mean?
Proactive means looking for overextended stocks to short, as well as compiling a list of healthy companies to buy (go long) when the dust settles. Like I indicated many times over in a previous article, bear markets and market corrections present the BEST buying opportunities.
Don't sit back and panic as the market drops or corrects; come up with a plan.
Have a plan!
I outlined mine above!
Aside from it being the mindset of professional traders, having a plan allows you to take control and ownership of the situation. You're effectively reclaiming power when you rise above. To not do so means you're letting the situation take hold of you. Don’t be that person!
So there's blood on the streets, now what?
Good, Bad or Ugly, leave a comment below.
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