Oh, Snap! Goodbye Social Media Platforms / Important Webinar
Oh, Snap! Social media companies such as Snap, Meta (Facebook), Pinterest, Twitter, and Roku are on course to shed more than $100 billion in market value after Snap soured the mood with a profit warning. Their CEO essentially said in a statement to forget about any estimate or guidance, the situation is bad for us. The company’s shares are set for a record one-day drop, down about 40% as of today.
Today, we traded the technology sector through TQQQ, and I ended the day at a loss. Brian also had a meh day. You can watch our not so amazing recap here.
Tonight, I am giving a presentation on how to find Stocks in Play in a bear market. I’ll see you at 8pm ET. Don’t forget to also RSVP here for our Vancouver meetup on Friday, May 27th.
Today’s Global News and Financial Recap
The US and the rest of the word are heading in different directions. President Biden and the Federal Reserve are spearheading a fight against inflation that has not been seen in decades. The rest of the world is not following in that direction. Given that the surge in euro-area inflation is being spurred by bottlenecks in supply rather than being led by demand, the European Central Bank won’t be rushed into withdrawing stimulus, President Christine Lagarde said Tuesday. Over in China, policy makers rolled out some $21 billion worth of tax rebates to stimulate demand in an economy hamstrung by its COVID-Zero framework. Here at home though, the Feds and the White House are ready to send the economy into a recession, if needed, to bring down inflation. The White House’s top economic adviser, Brian Deese, for example, while not excluding the potential for a recession, recently reasserted that inflation continues to be the administration’s “top priority”.
At Bear Bull Traders…
As mentioned above, for Tuesday Strategy, starting at 8pm ET, I will be heading up a webinar entitled: How to Find Stocks in Play for Day Trading. I will review how in a bear market I select stocks to put on my watchlist and how some stocks make the cut to be on the “usual suspects” list. I will also discuss what is a good order flow compared to choppy price action.
Tomorrow, for Wednesday Psychology, commencing at 8pm ET, Rande Howell will be presenting a webinar entitled: Building a Winning Trading Psychology Mindset. Have you ever asked yourself: Why do I keep losing my emotional control and crashing my potential even when I try really hard? It no doubt seems so doable – all you have to do is keep your act together and success is yours, right? But you can’t. The truth is that you are asking your brain to do something that is its worst nightmare. And it rebels by emotionally hijacking you. This is the problem you have to solve: How do you learn to train the brain into winning ways? Come learn what it takes to build a brain/mind for trading success. Spoiler alert: what you believe about winning is causing you to lose in trading!
Our policy at Bear Bull Traders is to not talk about politics, but these days, politics and the economy are so intertwined, especially in this election year. The Feds are under a lot of political pressure to bring down inflation. They have their foot firmly on the brake of the financial markets and they are not there to save anyone. Look at how Chair Jerome Powell opened his remarks at his last press conference, following the rate decision earlier this month:
“Good afternoon. It’s nice to see everyone in person for the first time in a couple years. Before I go into the details of today’s meeting, I’d like to take this opportunity to speak directly to the American people. Inflation is much too high and we understand the hardship it is causing, and we’re moving expeditiously to bring it back down…”– Federal Reserve Chair Jerome Powell, May 4, 2022
This line caught many off-guard. The Fed chair addressing the US electorate directly! Powell must feel significant political pressure about this, but it is not an easy task. The Fed’s job is to tighten financial conditions enough to keep inflation in check while giving the economy enough room to breathe so that people aren’t thrown out of work in droves. The danger is higher when you look at the financial markets. We’ve seen seven straight down weeks on the S&P 500 and the Nasdaq 100 and eight down weeks on the trot for the Dow Jones Industrial Average. For those of you keeping score, this is the longest weekly streak of losses since 2001 for the S&P and Nasdaq. And it’s the worst since the Great Depression for the Dow. Layoffs have already started, and the instability of the financial markets will hit the job markets soon. By September, just weeks before the election, we could have a situation where the equity markets are in a bear market, the US economy is slowing rapidly, and inflation is still at 6% or 7%. With mid-term elections around the corner, political pressure on the Fed will mount.
What do you think is going to happen by September? Please send me your thoughts by either replying to this newsletter or emailing me directly at [email protected]
To your success,
PS: If you have not already, I urge you to try out our free web-based trading simulator at stocktradingsimulator.com. It’s conveniently available 24/7, whenever you have time to practice honing your trading skills.