The focus for this week’s “Top Trading Links” is the changing market landscape and improving our trade craft. A different market environment has developed and navigating our trades (and setups) has become more difficult by the week.
Hopefully a few of these reads can help guide us through the influx of market volatility that has emerged.
Market Insights
- @kimblecharting notes how the recent signals in copper and crude oil suggest a shrinking global economy. A weak global economy has shown for quite some time in the charts and he gives us a couple of other assets to look at.
- @MktOutperform looks at V bottoms in the context of a changing market environment. Again, we see a massive shift taking place underneath the surface.
- @JLyonsFundMgmt discusses how the VIX has risen while the stock market continues to hit new highs. Is this uptick in market volatility yet another warning sign of an old bull market?
- @jessefelder analyzes how levered long stocks the U.S. really is. It’s an amazing visual. Demand for equities is exhausted even with the recent massive inflows.
- @brettarends discusses a popular method of numerous successful investors; buying the most hated stocks. “We’re all betting against each other”.
Trade Craft Insights
- @michaelbatnick reminds us not to get caught up in hindsight bias re: the biotech stocks (ETF – IBB). It’s been a huge move and looked like such a no brainer for years, but what active market participant caught this entire 5 year move?
- @darvastrader reminds us that sometimes doing nothing is best. It’s highly applicable in market conditions like these. The markets are moving so fast the opportunities seem endless, but the speed in the markets also makes it harder to maintain discipline. We’ve got to find ourselves a suitable balance.
- @SJosephBurns shares some of the best trading rules out there. While we might not agree with every rule on the list, there are some fantastic thinking points here. “If it feels good, don’t do it” is a simple, yet brilliant insight into a sustainable trading business.
Educational Insights
- @chessnwine shared this awesome Robert Shiller lecture on human psychology that’s a part of the Yale Courses collection on YouTube. From Prospect Theory to overconfidence, this video can probably benefit 99% of newer traders.
- @farnhamstreet lays out how to critically think to learn. Shane, the FS author, is a big Charlie Munger guy. Charlie is a big believer in the latticework approach to mental models. Simply put, we learn the most by learning the key ideas about many topics across various disciplines.
Thanks for reading and enjoy the long holiday weekend!
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