By Parabolic Financial Services, LLC
If you have been following the news, even in passing, you might have noticed that the stock market has gained more attention in the President Trump era than many other presidencies. President Trump prides himself in influencing the current growth and success of the stock market, such as the numerous all-time highs for the Dow and S&P 500. Over the past four years, the stock market has truly been remarkable, seeing some of the best and worst days in history. The 2018 Christmas season nightmare that sent the market down 15.42% in a week was one that will not be forgotten, which was more than the S&P 500 yielded from May 2018 to October 1, 2019.
Upon the inception of the Trump Era, the stock market is seeing increased volatility in an uptrend of price movement in indices and industrial averages. Amidst Trump’s first term, with the leveraging of social media, we have seen tweets and/or new press releases spur the development of new computer algorithms and indicators to gauge domestic market sentiment and the climate of the global markets. Trump’s influence can send traders into a flurry, drastically increasing the volatility, influencing large price increases and drops. Trade war issues between the United States and China, Mexico, Canada, Europe, and others are stimulating parabolic growth and severe declines simultaneously. In a turbulent market, we are seeing greater numbers of stocks rocketing to resistances or dropping to supports.
*Stock Market during Obama’s Second Term
*Stock Market during Trump’s First Term
Parabolic Financial Services has been developing fundamental and technical trading material, and in this process we have created a series of graphic analyses that quantify how swing traders are flourishing in this market.
Over the past 18 months, we have seen extreme changes in the overall market, yielding 14.26% returns for the S&P 500. However, during this same period, any investor could have yielded a compounded 32% return, using the basic support and resistance strategy, or a compounded 44%, using advanced trading tools like the data system produced by Parabolic Financial Services. The graphic below labels some of the key supports and resistances for the S&P 500 ETF (SPY).
The stock market is a complex system, but a greater understanding can be attained through the application of trading strategies and data tools. This will allow you to control and optimize your investments, or retirement, no matter who you invest through and in what period of market volatility we exist in.
The stock market is a collection of millions of investors with diametrically opposing views. When one investor sells a particular security, someone else must be willing to buy it. Both investors can never both be correct in an adversarial system. Therefore, having a rudimentary understanding of basic charting methods, technical and/or statistical analysis, and macroeconomic trends could aid in profitability while trading in an uncertain market with political and economic uncertainties. At Parabolic Financial Services, we are committed to helping you better understand the dynamic marketplace, as you seek to become a more knowledgeable investor.