We  R  not  Heading  into  a  Recession

It was a very brutal week last week.  Market took a turn for the worse on Thursday and it did not let up on Friday either.  Leading Growth Stock index  $QQQ  dropped  -3%  within the week and knifed through the 50 day sma(simple moving average).  It even went on to kiss the 100 day sma in volume that was more than 2 times the daily average volume traded with $QQQ.  Institutions were out in full force harvesting their well earned profits from the Technology Sector ($XLK) and Consumer Discretionary Sector ($XLY).  These 2 sectors have been the leading sectors to propel the  $QQQ  Growth Stock index to  +20%  by October 1st.  That sort of performance is not something to sneeze at.  You do however have to respect what the market is telling you and its prudent to take defensive action in the market now.  We have gone through 4 major corrections in the market this year after attaining its all time highs when the  $QQQ  dropped as low as the 100 day sma.  Here is the data of the 4 major corrections we had this year outlined below:

1.    Feb 8th          -10%
2.    March 23rd     -8%
3.    April 24th        -5%
4.    Oct 5th           -3%

Most traders and investors have a difficult time holding their emotions in check dealing with the market on a day to day basis.  Markets don't go up straight every day and one should expect the market to twist and make turns.  Market doesn't really care much for our opinions and well done research.  You just have to listen to what the market is telling you and pay attention to and respect the moving averages.  In the month of January of this year, the market was up by 10%.  Within 2 weeks after attaining an all time high on January 26th, market took away all of that gain back and  more within two weeks.  There is absolutely no reason to be in that sort of a predicament ever.  Learn to create a well thought out Trade Plan for any position you take and have the game plan to stagger your trailing stops should the market stumble like it did on Thursday and Friday of last week. 

Heading  into  the  best  3  Months  Ahead 

I know its hard to believe that October could be one of the best 3 months in the market this quarter after the brutal action we witnessed in just 2 days last week.  Let's just look at the historical data instead and hold our emotions in check.  Its true that we witnessed October market crash of the 1929, 1987 and 2008 when the market corrected over 50% and more.  According to Ryan Detrick of LPL Financial, he commented on CNBC on Squawk Box on October 1st that 

 "October tends to be a strong month for stocks during the mid term years, going back to 1950 through 2017"  

Since 1982, stocks have fallen only once during the mid term year in the month of October.  October has also been the best month going back all the way to 1950 for all mid term years.  On an average, October has an historical performance of  +3.3%  during the mid term presidential years.  Could we have a similar performance this year too ?  No one can predict that.  It's always good to be prepared should the market deliver such a performance.  As a reminder to my followers and readers of this blog, just know that the market did recover by  +12%  within 4 weeks after it had brutally corrected by  -10%  in January/February.  Market has been very resilient and the bullish trend is still intact.  Its a good idea to start raising  CASH  right now and be cautious in the market this week. 

Mentoring  Service

"Desire is the key to motivation, but it's the determination and commitment to an unrelenting pursuit of your goal - a commitment to excellence - that will enable you to attain the success you seek."

By Mario Andretti (race car driver)

Leading Growth Stock index  $QQQ  attained a performance of  +32%  in 2017.  This year it is already  +17%  with the best 3 months of the mid term election year ahead of us.  This is the 3rd year of a possible 9 year rally in the market.  Are you getting frustrated that you have been left behind and not fully able to capture the true potential of this unprecedented market rally?  Nothing should stop you from attaining success in the stock market.  

Schedule a 30 minutes of  FREE  "Discovery Call"  with us.  I will try to get you on board if you are committed to learning our system to Out Perform the Market.  The next 3 quarters historically - mid term presidential cycle year - tends to be some of the best quarters going back to year 1950.  Don't procrastinate and miss out on an opportunity to learn from me.

Happy Trading!

Amin