Mozart-level trading skills are best served by coming up with a finite number of objective measures to inform our decisions to buy or sell a stock or index. It’s not enough to “feel” bearish or think the end of the free money era will spell doom for the markets. Whether it’s a panicked crash or top, the best moments to buy or sell positions are emotional. The traders who profit are those best prepared and capable of stripping out their emotions. Which brings us to talented trader and all-around good egg Gary B. Smith of thechartman.com who joins me in the attached clip with his 3 reasons to expect a market decline and what he plans to do in the off-chance he’s wrong.
- Too many stocks over their 40-day moving averages
- Stocks have been going straight up for 3 months
- Market darlings are overbought
See the full “Breakout” segment below: