This week we have a stock market forecast for the week of 9/5/21 from our friend Bo Yoder of the Market Forecasting Academy. Be sure to leave a comment and let us know what you think!
The S&P 500 (SPY)
A terrible hurricane that did billions in damage, yuuge flooding in Manhattan with 7 inches of rain...
And the S&P still stays in its coma.
Looking at this historic disconnected rally in the markets, I’m reminded of what it’s like to be deep in the woods of Maine.
Immersed in the wild, as you bushwack your way towards your objective, you stumble across 4 big trees, all in a perfect line.
Nature abhors square edges and straight lines, so you KNOW that there is an old road or foundation nearby and that these trees were planted by humans.
This market is the opposite for me. It shows little human behavioral patterning on the daily and weekly level, and you really have to get down into the microstructure intra-day to find the action/reaction cycles that prove that humans are there pulling the trigger!
There is still a lot of easy forecasting in those timeframes, but at this point, I can’t add much value to the weekly. I still think we are waiting for a catalyst and that this will produce a nasty correction. In the meantime, things are starting to come into alignment, so I have a new opportunity for you all to ponder...
Vulcan Materials Company (VMC)
This is a company that has rallied nicely along with the market since bottoming out after a nasty drop down to the $70 per share area. Now it’s showing strong signs of distribution, and I have been stalking it for a short entry.
The confirmation I was looking for showed up this week, and so this stock is now offering a high probability short anywhere in the red zone. If the price breaks out to a new high and violates the highs of the red zone, this forecast would be proven a failure, and stop losses should be executed.
I would expect this stock to test down to at least $160, but if the bears come out in the coming weeks, we could see a lot more profit potential. I’ll be able to make a more accurate forecast about that once I can take some supply/demand measurements as the $160 support is tested.
SPDR Gold Shares (GLD)
Gold continues to rally on rapidly expanded bullish pressure. It is currently testing an area of resistance at $171 per share, but based on the readings I’m getting, this should be broken easily, and the next stop would be $180.
Time to sit back and let this one “Simmer.”
The PNC Financial Services Group, Inc. (PNC)
PNC failed to “rinse out” the daily highs, and this produced a lower high and a sharp reaction from the bears as the price dropped about $7 per share.
This selling was the institutional players blowing out their positions after having failed to achieve their manipulative goals of squeezing out the stops. I love these “trap trades” as they tend to produce an acceleration to the downside.
I would expect to see PNC print a big red bar for us in the week to come.
Today’s Lesson: The Top 5 Reasons Traders Lose Money (Reason #1)
Because you are human, your brain is designed for survival in a physical world…NOT the human-created electronic world of screens and data and finance.
Just about every impulse and gut feeling will be 100% WRONG, and most traders fail because they don’t realize that it takes specific training to suppress and ignore your mind when it’s screaming at you to do the wrong thing at the worst possible time.
The difference between the easy money everybody seems to be able to “make” in demo mode vs. the faceplant with real money is what I call “The Reality Gap,” and most of what I do in our paid mentorships is work with folks as I coach and handhold them through the process of CLOSING that gap.
I want everybody to get EXACTLY the edge their process delivers, no leaks!
So let’s take some time to work through the Top 5 Reasons Traders Lose Money.
Reason #1 – Lack Of Or A Poorly Defined Trading Plan
This seems so obvious when you say it, yet so many traders I’ve helped had no clearly laid out a set of rules to control their approach to the market.
That’s why I use VERY simple patterns and setups as teaching tools in this process. They are SO SIMPLE that it makes building a trading plan simple and easy.
Then as a bonus, the students get a wake-up call about their mental game as they struggle to follow the rules on a REALLY simple strategy.
Your trading plan should have as many elements as there are decision points in your strategy.
Your trading log is the MOST IMPORTANT thing you have because it gives you a data set to tweak and optimize. Your TRADE PLAN is the 2nd most important document in your trading operation!
I made a video about these questions as part of our mentoring operations and haven’t shared this outside our mentoring community.
But I'm going to risk it because you need to understand this if you are going to become a viable candidate for our high-end trading community and mentoring at some point.
I hope you DO THE WORK and understand the value I’m dumping in your lap here.
WARNING: Good trading is NOT SEXY
But the radical increase in your results after implementing this is DEAD SEXY!
SO GO DO IT!
To Learn How To Accurately and Consistently Forecast Market Prices Just Like Me, Using Market Vulnerability Analysis™, visit Market Forecasting Academy for the Free 5 Day Market Forecasting Primer.
Check back to see my next post!
Market Forecasting Academy
About Bo Yoder:
Beginning his full-time trading career in 1997, Bo is a professional trader, partner at Market Forecasting Academy, developer of The Myalolipsis Technique, two-time author, and consultant to the financial industry on matters of market analysis and edge optimization.
Bo has been a featured speaker internationally for decades and has developed a reputation for trading live in front of an audience as a real-time example of what it is like to trade for a living.
In addition to his two books for McGraw-Hill, Mastering Futures Trading and Optimize Your Trading Edge (translated into German and Japanese), Bo has written articles published in top publications such as TheStreet.com, Technical Analysis of Stocks & Commodities, Trader’s, Active Trader Magazine and Forbes to name a few.
Bo currently spends his time with his wife and son in the great state of Maine, where he trades, researches behavioral economics & neuropsychology, and is an enthusiastic sailboat racer.
He has an MBA from The Boston University School of Management.
Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation for their opinion.