Stocks are roiling after the Trump Administration’s “Liberation Day,” but let’s be real here – stocks were already in a technical downtrend in the short-term, and the market’s internals have been weak for a couple of months now. Even with sentiment down in the dumpster, it doesn’t seem or feel like we’ve had true capitulation yet. This leads me to believe that there’s still more downside on the table. In terms of operating in this environment, it ultimately comes back to what type of trader you are and want to be. I talk a lot about time horizons, but let’s dive into what to do depending on your strategy…  Planning Versus Reacting Let’s start off with the long-term investors here. You better believe that there were people panic-selling yesterday’s open following the nasty gap lower. Periodically, I like to tease buy-and-hold investors for owning markets in downtrends, but the fact

It’s the last day of the first quarter, and it was a tough one for the U.S. market. Traders and investors alike were reminded that a financial world of opportunity exists beyond the United States’ borders. Fortunately, we were able to participate in that emerging move. But as we head into the second quarter and I sit here looking at the market’s internals, I can’t say I’m too excited about the market’s prospects in the near-term. Can this change quickly? Of course. But in the meantime, a fair dose of caution is a good idea. Here’s what I mean When Defensives Lead, Play Defense The energy sector has been running the table year-to-date. Interestingly, the price of crude oil hasn’t participated much in this rally with the energy sector. It is worth pointing out, however, that energy is a late-cycle outperformer. That very outperformance is a telltale sign that a

My parents moved to the United States from Italy a year before I was born. My father was in the cement business (surprise, surprise) and my mother worked as a secretary at Chrysler. I grew up in a small town in southeast Michigan littered with its fair share of skeleton factories. I realized at a young age that going the route many of the elders in my community had simply wasn’t an option for me. In other words, there were no options for a decent-paying job with minimal qualifications. So, I had to go the education route. Admittedly, at the beginning of my college experience, it wasn’t my primary choice. I built a solid reputation as a soccer player in my high school years, and ended up being an All-State player for two years in a row. This led me into college soccer, where I started off at a mid-major

The finish line is in sight for the first quarter, and it served as a humble reminder for many that volatility lurks around every corner in this market. Does that mean there weren’t any opportunities on the long-side of this market? Absolutely not. In fact, I think we have new themes that are really going to stick going forward. But as I sit here and take stock of what happened in this first quarter, it’s become clear to me that we’ve entered a new paradigm for markets. Those that fail to adapt to this new environment will be punished accordingly.  Here’s what I mean…  The Trend is Your Friend, Until the Trend Ends First and foremost, let me start off by saying that I am a trend trader. In other words, 9/10 of my trades are going to be in the direction of the underlying trend. And for years, the

A late-day rally on Friday saved stocks from a very nasty close on the week, but after surfing the charting landscape over the weekend, I’m not surprised to see this squeeze playing out to start the week. The billion-dollar question, of course, is whether this is another bear market rally or the start of something that could stick. To help answer this question, we defer to the market’s internals, and specifically, at the sector level. So, are we seeing the right strength from the right places, or are the bulls being set up for more disappointment? Let’s discuss Still Missing the Right Leaders Just as a quick review, there are certain sectors we see outperform when the market is bottoming, and there are certain sectors we see outperform when the market is topping. As you can see, energy (XLE) has really decided to make its presence known over the past

We’re heading into the final full trading week of the first quarter of 2025, and it’s been a tough one for the U.S. market. Other parts of the world, specifically Europe and China, are set to cap off a remarkable quarter, which begs the question: Can these trends continue into Q2? I’ll be covering my quarterly forecast and gameplan in my Trinity Trade masterclass on Wednesday, but it’s safe to say there are some more risks of volatility here in the immediate future. The bigger question beyond these market trends from Q1 is whether the economy is heading into a full blown bear market and ultimately, an economic recession.  Let’s discuss…  Every Current Short-Seller is a Future Buyer One of the trickiest characteristics of a bear market is that they often feature some of the sharpest rallies. This may sound counterintuitive at first, but it’s a simple function of short-

Spring is whispering its arrival – I can hear it in the morning birdsong and feel it in the shifting air. While this wasn’t Michigan’s harshest winter, I seem to have packed some of that cooler air with me during my recent Florida escape. There’s something undeniably hopeful about the changing seasons. Interestingly, the legendary early-20th century trader W.D. Gann noted that markets often exhibit meaningful trend changes around seasonal transitions. Not every equinox brings a market reversal, of course – but I’ve witnessed this pattern play out enough times to keep my attention particularly sharp during these periods. Today, I want to share how my experience in agriculture has profoundly shaped my approach to trading. In both fields, we operate within cycles beyond our control. And I’ve learned that success comes from moving with these cycles rather than fighting against them… Making Way for New Growth When spring arrives,

Stocks bounced from an oversold level late last week. As I settled back into my desk over the weekend, I was able to take full stock of the situation. It’s important to realize that some of the biggest rallies in stocks often occur during bear trends. These come from short squeezes. Remember, every current short seller is a future buyer, by definition. We have another important week ahead, especially with the Fed meeting. It seems as though the White House is trying to force the central bank’s hand into rate cuts, but let’s not pretend like the market is innocent here. I think the rate cuts will come, but not this week. That said, it looks like some money is flowing into a certain area of the market that could benefit from a dovish Fed. Here’s what I mean…  Still Missing the Right Leaders Last week, we saw a big

I’m wrapping up my first real vacation in 5+ years down in sunny Florida. Though my laptop only collected dust for three days, my mental batteries are now charged fuller than a Tesla at a Supercharger station. Those three days of peace gave me something rare: time to think. And perfect timing too, because this market is sending mixed signals that would confuse even the most seasoned traders. Are we diving into a recession? Is this the start of a bear market, or are we looking at the mother of all buying opportunities? Before I share my latest market insights, let’s talk about something more fundamental… The Power of Less You’ve heard me say it before: “Less is more.” In trading, more trades don’t automatically mean more profits. This principle extends beyond the markets. We live in a world of abundance, where “more” has lost its magic. What’s truly scarce?

Hello TheoTrader, The global equity realignment is still ongoing, as the market’s internals here in the U.S. tell us defensiveness is the proper position. But in reality, the selling has been pretty orderly thus far. The meaning behind this runs deep. For years, U.S.-based traders have been spoiled – all the exciting action was taking place here, after all. I’ve been talking a lot about China recently, and I still think the best opportunity for this year, going forward, is across the Pacific. But as I’m about to show you domestically, the U.S. market still has problems. It’s trying to heal, but I still need to see more.  Here’s what I mean… Healthcare Is Big… But There’s a Catch The healthcare sector, which was one of the worst-performers of 2024, has emerged as the shining star to start the year. Unfortunately, this is a better sign for bears than it