Efficiencies and Change: Navigating August 2024 Financial Markets

Thursday August 1, 2024

This morning, my husband and I had to do one of those dreaded errands that are just part of life. Going to a government office to take care of some sort of registration. In this case, it was registering our car here in Texas, since we just bought it out of its lease. And of course, there's only one place for all the residents of Austin and Travis County to go to. And that one office, despite having about 20 customer service windows, only had about three open and functioning at the time that the doors opened to us, which was 7.30 in the morning. So for a process that ultimately only took about 10 to 15 minutes, we had to spend three hours of our time driving, waiting, waiting, and waiting some more.

I share this because it reminded me how much I despise inefficiency. It reminded me how much I want to optimize resources, energy, and time. This goes for life, this goes for this education business, and this goes for trading.

Now, there have been a lot of economic events this week, and I'm still processing a bit of what the Fed shared, got to look at Amazon and Apple earnings, and of course, we have jobs data coming in on Friday. And when there's all of these events happening, it's easy to want to go and pour over endless news reports, or just have the talking heads chatter in the background, or read many different viewpoints, including the one I'm sharing here, to get a sense of what in the world is going on.

But that's exactly why I love price charts! They distill it down. They take the factors that are out there on which people are actually acting – the buyers and sellers – and instantly account for those forces in the visual of the chart. And when you start looking at these charts over and over, like I have for 24+ years, the patterns they present become easier to identify, and you start to feel more comfortable “relying” on them.

Here's the thing. I always say, and this stands true, that I don't have a crystal ball. What I mean is that even though I make it look really easy to analyze and trade based on price, time, and momentum, it's not necessarily easy. It does require some effort. But it CAN be simple. And my job is to take what has been complex for most and make it simple. I've honed in that skill to be able to do that for you.

Even then, there will be times where I will deploy all of my typical analysis toolkits, and they won't work according to the exact plan. That's why I also teach in my various courses and in my research how to adjust and pivot when all of these market factors, economic news, interest rate, policy, election events, and more change things up.

We're now about 3 months from the election day, and we are bound to see even more upheaval. It is reasonable to expect that you can rely on your price charts to identify patterns and trends, but it is not reliable to expect that everything is going to unfold as if it's just another calendar year heading into a typical back-to-school season. I mean, there's even the first NFL preseason going on, and they've changed the kickoff rules! Change is life and being able to adapt to change is how you make the most of life.

The bottom line is, your job as a trader is to find an efficient approach that works for you.

–> If that involves fundamental analysis like reviewing analyst reports, fantastic. Make that something that you can do systematically so you don't have to get lost in the weeds.

–> If your approach is heavily dependent on the technicals like mine, amazing. Just don't get married to any setups on your charts, and don't think that whether you create a forecast or set of analysis or anyone else does, that the market owes you for that to be fulfilled. It does not.

That's why from the moment you make a trade to the moment you take it off, the longer term it is, the more chance you have for things to wiggle around. And if you're holding on to positions that do extend through the overnight from one trading date to the next, you just have to be aware that you're now in an environment that has more exposure and risk to things changing.

So I hope that helps you prioritize and focus on what you need to continue to take advantage of these wild times. I will continue to share my insights with you if you find them helpful in various forms. Do let me know in the comments down below if my blog posts have been among those helpful tools. Thanks for reading!