The stock market is often treated as if it's rocket science. There are complex explanations of things like inverted yield curves, central banks, currencies, bonds and a million other things that impact equities. If you want an explanation for what the market is going to do next you can find dozens with a variety of predictions and reasoning.
All you really need to know about the market is that it goes through cycles of ups and downs. It is as inevitable as the seasons or the phases of the money. We can't know when or what will cause a shift in the cycles but we can know that it will occur.
Over the past two weeks, the market has started to fall into a down cycle. The reasons for that are fairly obvious. The Trade War with China, the relative value of currencies, central banks are cutting rates, a bond market that is exploding higher, worries about a recession, and negative seasonality are all contributing to the pressure.
It is helpful to understand what drives the market to do what it does but what is far more important is to simply embrace the price action. Trying to argue or fight with it is counterproductive. Far too many market players focus too much on when it will shift again rather than simply dealing with what is in front of them. If you haven't raised cash and made defensive moves then you are ignoring reality.
There are some folks that believe that this weak action is going to come to an end very soon. Maybe. Many times the corrective phases come to an end quite abruptly but that isn't a great bet. The prudent bet is to look for the weak action to continue. That is prudent because it is far more important that market players protect capital rather than anything else.
I wrote yesterday about how the most important thing you can do is keep your accounts close to highs as possible. That should be your focus.
Forget the pundits, forget the predictions. Embrace the fact the market is undergoing a correction and stay focused on protecting your capital. Do those two things and not only will you not fear the market but you will be in position to produce exceptional gains when the cycle turns back up.
We have a soft open again this morning. There isn't any easy support at this point and no shift in the negative narratives that are driving the action.