When In Doubt, Zoom Out!
We don't want to suppress our feelings. We want to accept them for what they are, and then put systems into place to help us succeed, despite this natural d̶i̶s̶a̶d̶v̶a̶n̶t̶a̶g̶e̶ opportunity.
Some refer to this as temporal discounting: making decisions today to help our future selves.
Longer-term charts are my #1 prescription for that "getting lost in the noise" problem we all have as human investors.
Here's the S&P500, for example, and I included some key Fibonacci extension levels that go back a few decades:
This 4420 level is a big one. And we're still below it.
How much of a problem will this be?
We went over some of the more short-term levels on Friday. Make sure to check that out here.
But bigger picture, this 4420 is a big level of reference, just like 4100 is in the short-term.
So then what's working in this market?
Well it's not the developed markets outside the U.S...
Both of these are great representations of how the rest of the world looks, particularly the developed markets.
There's still nothing to do there if we're below their 2018 highs.
You know what else is not working?
Investors who fell for the ESG scam:
Wall Street made a killing on this one. Good for them, I guess.
But a lot of investors out there actually convinced themselves that they could save the world through their portfolios.
Losing money in the market, however, is probably the worst way to put yourself in a position to be able to save the world.
In fact, it's the dirty energy that's making everyone money.
The dirtier the better.
The worse it is for the planet, the more money it's making investors.
And that's not something I have control over, just as a reminder. So don't shoot the messenger.
I'm just here identifying trends. That's what we do as investors.
So let's not get that confused.
The dirty energy stocks are working. The clean "energy" ones are not.
We can't invest in the market we wish we were in. We have to invest in the market that we're actually in.
Here's CONSOL, which is a coal stock from Pittsburgh. This is the exact opposite of ESG:
Coal is working.
So is Allstarcharts darling Cheniere Energy $LNG.
A lot of ASC subscribers have done very well with this one, especially early on in this Energy Bull Market.
Is $LNG now ready for its next leg higher?
There are stocks out there that are working.
A lot of stocks and sectors are not.
Let's stay away from what's not working, or at least tighten any stops, and then focus on what's already making investors money.
I think there is a time and a place for both strategies, depending on your time horizon and risk tolerance. It also comes down to your overall objectives.
There's nothing wrong with bottom fishing, if/when the opportunity presents itself. But those are low probability / high reward scenarios.
Trend following presents a much higher probability of success, and both low and high reward scenarios.
So just keep that in mind.
Premium Members, here are all the updated Risk levels and Price targets.
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