Put two traders in a room, and one might scream to sell while the other puts in orders to buy. So who’s right? Well, they both could be—depending on the indicators they’re looking at and the kind of trading you want to do.
We’ve rounded up our InvestorPlace advisors to give you their read of the market.
Let’s get to the analysis:
John Jagerson and Wade Hansen, Slingshot Trader
The economic news has been fairly negative so far this month. However, investors have gotten another temporary stay of execution by the actions of the big central banks. The easing by the Bank of Japan has been enough to lift asset prices through the “carry trade.” These actions have been enough to overcome the drag of durable goods, real estate and new factory order reports this week. However, those effects tend to be fleeting, so we are continuing to focus on the trend of earnings reports and adjusting our trading for a potential downtrend.
Jon Markman, Trader’s Advantage and CounterPoint Options
Smart-alecks like to make fun of the “sell in May and go away” theory — but it must be said that it has actually worked over the past three years. Each of those years had its own reasons, but the fact remains that investors may feel itchy trigger fingers as they contemplate getting ahead of everyone else who might think about taking advantage of the four-month span of strength that has emerged in the market.
You never know exactly what causes these sudden turnabouts, either positive or negative, but the reality is that volume is still so thin that any large position-holder can have a surprising effect on the liquidity and direction of the market.
John Lansing, Parabolic Options, Trending123 and Power Trading at the Open
While I am bearish on the overall market, we are in full-blown earnings season. So, traders can find plenty of bullish opportunities with their own technical and fundamental backdrops that can trade independently of the overall market even when (not if) we start to see the kind of volatility we experienced last week. Don’t bet the farm on bullish plays all of a sudden, but a nice balanced approach with high probability setups is what the market is telling us. It’s speaking, so I am listening!
Ken Trester, Maximum Options
Our indicators are giving bullish readings, an upgrade over last week’s bullish to neutral. And not only have the indicators returned to bullish mode, it is how they got there that is important. The leaders have been the more speculative stock sectors and markets, a welcome change from the defensive-oriented issues that had been leading. Speculative issues taking the lead is more in line with a traditional bull market and is indicative of investors and traders willing to take on risk.