But that was then and this is now. In after-hours trade, the indexes are tumbling on continued Asian weakness and US futures are down more than half a percent.
Is this finally the start of the long-predicted stock crash? Bears are definitely dreaming about that tonight.
But if bears have been wrong all year, what are the chances they finally get it right this time? Ummmm, yeah…..
While there is an entire day for this situation to develop, I don’t put a lot of weight in futures. This is an incredibly thin market and easily swayed by small and impulsive traders. Big money trades during the day and they couldn’t care less about what a bunch of guys in their pajamas think.
Occasionally other parts of the world lead our market, but those episodes are few and far between. Our current bull market is fueled by a huge resurgence in the US economy and what’s going on in the rest of the world doesn’t matter. In fact, things are so well foreign investors are flooding into our markets because this is where the party is happening.
No doubt Asia and Europe still have their problems, but they are not a concern for US investors. If these weak futures cause our indexes to gap lower today, that gives us an excellent entry point. Wait for the early bounce and buy with a stop under those initial lows. This is an easy, low-risk trade. If the selling resumes, no big deal, we get out and buy the next bounce.
Robinhood (NASDAQ:HOOD) got slammed on its first day of trading, but that usually happens to most over-hyped IPOs. Expect the selling to continue for a few weeks and even months. But this will eventually bottom like it always does. And that is when investors who believe in this stock should be taking advantage of those discounts. No doubt a good trade in this stock is coming, we just need to be patient and wait for it to come to us.