Arete Sunday Newsletter

It's simple, not easy! 🙂👷🥋

May 16, 2021

The discipline needed to invest successfully is simple to understand. You must create a set of rules and abide by them. Everyone who starts investing understands this after a short period of time. They create a set of rules that are not perfect. They never are nor ever will be. At the first glance of our rules hurting us in some way, we change them to guidelines. Something that is viewed but not concrete. As soon as we do this, the next lesson is learned. Not following the “guidelines” leads to another issue. Usually, it’s something worse than was first experienced. Why? Because we do not want to be wrong. We have tied our ego to a specific outcome and when we do that nothing could be more damaging. If the investment does not work it’s us that is the issue. A great example of this right now is $BTC. We are currently down 31% from the peak of bitcoin. If you are on any social media platforms you can see the people that have tied their Identity to its performance getting upset in its decline. Blaming Elon Musk, energy consumption, and “inferior” coins. None of this matters. What matters is It’s down and what do your rules tell you to do. Whether $BTC goes to $20 dollars or $200,000 is immaterial. What matters is what you do about it and having solid rules laid out AHEAD of time makes all the difference in the world. For the past several months I have thoroughly enjoyed writing this letter. If you take only one thing from it let it be this. Never tie your ego to ANY investment position. It can be catastrophic. Instead, create a set of rules that you follow to the letter and improve on them over time. Simple, not easy.

The $QQQ stopped plummeting with its death by 1,000 cuts moves that have simply been brutal. We have two up days this week. This is the first time in a month that has happened. We also achieved our first goal. We cleared $323. We closed right at the 50-day moving average and above our Tuesday high. As you may remember our second goal is close above the 50-day moving average. While I do believe we are in the bottoming process, this does not mean straight up. We should have some time to base and build positions. I would not even be surprised to see us test previous lows. All of this is healthy. We saw some of the air come out of commodity stocks. Keep an eye on the $XLE a move over $55.50 is bullish for the sector. The increasing tensions in the middle east might get us there. Other inflationary pressures are abating. Lumber was down 11% in a day. Money market accounts are pricing in a 100% chance of a 25 basis point hike in 2022. The $SPY continues to act the best. Consider looking at the $XLK this is the technology sector of the $SPY. 40% of it is made up of $MSFT and $AAPL. As you are aware $AAPL is back in the newsletter. $IWM is still below its upper channels lower trend line. It needs to get back over in very soon. Key Levels are marked on the charts. Let’s do this!

Let’s look at our Indexes!

Let’s look at our Stocks!

You are going to see more stocks added shortly and new leaders emerge. Consider watching the videos and turning on notifications on Twitter. This market is moving very fast.

Subscribe to YouTube! 👈Subscribe and turn on notifications. Below is a video of Saturday’s TOP 10 List. We did it live stream with tons of actionable ideas. Also, I walk through several trades. Consider making these videos a daily part of your routine. If I go over the lessons from the trading of the pro series during them and point them out in real-time situations.

As always all investment decisions need to be made by the individual. We all have different risk profiles.No two people trade the same. Understand the buy points, stop losses, trims are suggestions. For example on stops. I want to see it close there at the end of the day.

You need to develop your own process. I am willing to help and offer feedback.

Please make sure you Subscribe to Twitter! 👈and turn on notifications. There are times my updates are timely in regard to the Newsletter as well as other ideas. I called levels on $ARKK $UPST $AAPL on Friday. You can see the timestamps.

Any questions please message me.

Thank you again for all the messages telling me how this Newsletter improved your performance and made you a better trader!

The Chasing Alpha Newsletter

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