Weird Thing About Pullbacks

Hey friend,

Nothing on the economic calendar today.

But we do have a lot of big jobs data coming out this week – from job openings to unemployment.

Let’s see how the markets have been moving.

The Daily Direction

Note: All indexes closed lower to end last week and opened lower this morning as well – sending the short and medium-term directions for the Russell, alongside the short-term direction for the Dow, back downward.

Check This Out

Not sure what stocks to target during this pullback? Here’s one powerful candidate (it’s a stock Nvidia NEEDS).

The Daily Nugget

Risk can fall while fear rises.

When a stock is ripping higher, buying it can feel pretty safe.

Everything is green.

The trend looks strong.

And there’s not much on the chart making you nervous.

The problem is, you may also be buying after the stock has already run well above its key moving averages.

Now let that same stock pull back 5% or 7%.

Suddenly the trade feels much scarier.

But if the broader trend is still intact and those important moving averages are holding, the opposite may actually be true.

You’re getting the stock at a lower price.

It’s no longer as extended.

And the level that tells you the trade isn’t working is usually much closer.

That can give you a better entry with less money at risk.

Of course, if the stock breaks through support and the technical picture changes, that’s different.

But a pullback by itself doesn’t automatically make a trade more dangerous.

Sometimes all that’s changed is the price – and your emotions.

So when the market gets shaky, try to separate the two.

Ask whether the setup has actually become riskier…

Or whether buying simply feels riskier because you’ve just watched the price fall.

The Traders Agency Team