Patience You Say

Market Effects of Stagflation

So how many days has it been since the markets have essentially gone nowhere? All you day, scalp and swing traders are starting to lose it; ain’t really nothing to do. At least during more tumultuous times you had enough up and down movements to at least look for a trade. Now you’re starting to check out social media in search of the next best article describing what’s happening or something we can’t talk about here.

What’s being exhibited is the exact same historical pattern that prevailed during the 1970s; it’s back in focus. Trading was so slow at times in the 1970s that they stopped using stock symbols to display trades on “the tape” and started printing out the entire name of the company. No that didn’t really happen but at times, few if any trades were crossed. Mind you the volume, sheer number of different instruments and markets are exponentially larger in size than back 50 years ago but what you’re seeing is the same; the level of activity has decreased. When interest decreases demand follows.

Uncertainty comes into play just as it has in the past. When examined over extended periods of time, a “lack of interest” was usually followed by a correction or downside. It’s been a while since investors are actually interested in short term government debt or certificates of deposit from their local bank. There’s alternative investments in the markets today that haven’t been around for years. Safety is a viable alternative given the uncertainty and as you traders are witnessing; it getting tougher to identify a good trade.

I can’t find the exact cartoon of one of my favorites from years past so this one will have to do. Remember, not having a position is a position. Put that into your toolkit the next time you review a trade’s potential; perhaps it’s a good idea to just watch.

Hope you enjoyed this post. I’m just a young 68 years old; my Dad became a broker when I was 13. It’s time for me to ‘give back’ to all of you what’s in my head. It’s not always pretty but it’s based on history . . . and history, unchecked, repeats itself.

Everyone learns at their own pace. If you pick everything up the first time through, great but if not email me at dzimmer@substack.com so we can further help.

For those of you who look for daily advice, my position of being short and looking for additional downside hasn’t changed. It’s days like these when suggesting something’s changed would be an inaccurate representation so I’ll just conclude with my best to all and thanks for the following that’s been created. I appreciate the eyeballs.