Let’s just call it like it is — this market’s a mess.
Not in the catastrophic, financial-crisis sense. But in the “what the heck are we even reacting to today?” kind of way.
One day, we gap up on pretty much nothing. Next, we give it all back on a whisper of bad news or an overblown headline. Tariffs are the star of the show, of course, but given that the administration has now given percentages for each tariff scenario, you’d think the market would do a better job pricing it in.
Yes, I know Trump is jumping all over the place and switching from doubling down to pausing… but historically, the stock market has been very good at pricing in chaos and limiting the wild moves to an initial reaction. Not so lately.
Now we’re going to have major earnings and future forecasting from big companies added into the mix — which could do anything from reorient the entire market to not even mattering.
I think these kinds of scenarios typically make retail traders want to chase big moves. I mean, when you see Apple drop 10% in a day and jump 6% in another, it feels like, “If I could just catch one of those.”
But in reality, I don’t think we can do anything with a whole lot of conviction right now.
I know I’m supposed to be the young, high-risk gunslinger of the group… and I do have a pretty aggressive mindset. But I just don’t think we have anything to go off of right now.
Don’t get me wrong — I think we’re getting closer to a “settling” point where we can jump back in and be aggressive, and I cannot wait. As I’ve said a lot lately, I think that’s going to be the opportunity most folks miss (like post-COVID) — and I want to be sure I’m aggressive then, and help you be aggressive too.
But I don’t have enough conviction yet.
Which is exactly why I’ve scaled way back on directional plays lately. I’m not bearish. I’m just realistic. The chart of SPY alone should tell you that things are unresolved. No real base. No real trend. Just a tug-of-war between people hoping for soft landings and others bracing for hard ones.
Even on some of my favorite strategies like Automated Options and Overnight Options, I’m continuing to stay consistent — but trading with smaller size.
The stuff I am doing is, well, a little more boring. Leaning into the overpriced options and using more income trades like covered calls.
Of course, I’m continuing to be aggressive with all different types of pair trades (if anyone did the GLD long vs. SLV short, that was a grand slam).
Because here’s the truth: this isn’t just a choppy market. It’s a new environment altogether. We’re not going to see the Fed start adding floods of liquidity into the market. We don’t know what the Trump administration is going to do next. We don’t know how aggressive the Fed will be this year. We’re not seeing insider buying pick up. So we’re in a very literal “no man’s land” here.
That doesn’t mean I am sitting on my hands. As I shared a few weeks ago, I am starting to accumulate. Tom Busby and I recently spoke about a few stocks we like and we’ll share some tomorrow during a live presentation.
But, in general, I am focused more on prepping for the next cycle in the market, than making big guesses about this one.
Capital preservation is definitely at the heart of that.
— Nate Tucci
