The noise of the market action continues as we bounce between speculation of a future resolution in the Middle East and the ensuing lack of follow-through updates.  Is this time different?

Unfortunately, the only way we will know if it’s different is if (or when) it is different.  In the meantime, the downside trend in the market continues, but it’s paired with the uncertainty of a potential update that could change everything, and quickly.

The one thing that is certain for me is that if the technicals are right, nothing really changed on Tuesday.  When I look at the broad market, the downtrend is still intact.  We just happen to be at the highs of the bearish trend channel instead of oversold at the lows of the trend channel, where we started the day on Tuesday:

The S&P 500 is showing signs of attempting to bottom, but if the market has told us anything, we need more.  Without concrete evidence that the market bottom is in, and that real progress is being made in negotiations with Iran, the market is due to continue the slide.  And when I look at the AI projections for the broad market generated by the Stock Forecast Toolbox, the pattern of the trend is further confirmed, with expectations that Tuesday’s price action was nothing more than a false rally:

Again, if the fundamentals change, the market behavior will change.  The bounce will be known to have been the low.  The market will run higher.  And when it does, traders will regret not buying even though there was no real reason to buy.  Right now, the market indicators are telling me to sell, or at the very least, I probably shouldn’t be buying.  While I’d love to say that there’s something out there with a big enough expected return to buy and hold for a week or sell and hold for a week, a lot can (and probably will) change in the next week or even in the next hour.

So rather than taking a shot with a trade with no real edge, I think this is a prime example of trusting the technicals, the fundamentals, and the AI, and recognizing that now is the time to wait.  After all, that’s a big part of trading – knowing when to push for new trades, and when to wait for more information before committing capital and taking risk.  Whatever happens in the day ahead, I’ll be ready to act, and I’ll be relying on the Stock Forecast Toolbox to help me with the stocks I can identify as good risk/reward setups.  And today, I’ll listen to the Toolbox and exercise patience.

Now’s as good of a time as any to get that Free 7-Day Trial to the Toolbox because when things do turn, the toolbox will be the first place to go to see where the real opportunity lies.

And if you have any questions, never hesitate to reach out.

Keith Harwood

Keith@OptionHotline.com