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Is the weakness in the stock market over?

I had a bullish trade when I bought futures contract late in April 2024 and then I was trailing my stop higher. I thought this could continue longer but then I was stopped out. I was thinking: did I place my stop loss (in fact it was a stop gain loss) order too close the market and I was stopped prematurely? A few days later the stock market started selling more and it showed up that it was a good move. I was stopped out right before more selling happened, while I was waiting for a new breakout that has never arrived.

Stock market Futures Trading

The price crashed on a very high volume (investors were freaking out about inflation, yields, FED and so on, old story). Despite the recovery attempt the next day, it failed and the market continued lower and eventually fired a short selling (breakdown) signal.

Stock Market Profits

We sold the futures short and set up a new stop loss order. The stop loss was selected at about 0.50% above the market risking $1,537.50 if the trade turned against us. The Friday’s initial trading proved that we were on the right side of the market. Not even in a day, we were making $1,700.00 of unrealized profit. I was excited about it. But then the market reversed and started rallying higher.

Maybe, this rally will turn out to be fake and next week we will resume selling but on Friday, it was not clear. And it still is not clear. Tomorrow, we still may rally higher and create new highs (and fire a buy signal). I do not know it. No one knows. The only indication that is telling me that this bullish trend may continue is that the price action printed a very large green candle on a very high volume while volatility crashed more than 10%. I wrote about it in today’s weekly newsletter why the market may very likely continue higher next week.

This was all happening very fast and when I started seeing profits disappearing, I closed the position. It turned out to be the right move. If I waited longer, the trade would have turned into a loss (the stop loss would have hit). By reacting fast, I preserved a small gain:

Stock Market Profits

This appears to be a beauty of Futures. Thanks to leverage, this small price difference of only 4.25 points (5,244.25 – 5,240 = 4.25 point) delivered a relatively nice profit of $212.50 (4.25 * 50 = 212.50).

Stock Market Profits

However, the price action happened so fast that this posed another issue I am trying to solve. I published this trade to my subscribers so they can copy-trade it if they choose to. But when the market started moving up fast, I issued a closing order alert but the subscribers may have not received it on time to get our at the same price as I did. They may have even close the trade for a loss.

So, I am thinking about what ways and options I have to post alerts faster. Not easy task. Emails take time to compile, I tried Twitter but it didn’t seem to work well either. So, if you are a subscriber, or even a reader of my blog and have an idea how to post our trade alerts fast, please, let me know if the comments. I am genuinely interested in helping my followers in the meaningful way and deliver my service fast enough to react.

So, right now, I am out of the trade and again waiting for a new entry signal. If the futures breakout above the resistance or breakdown below the support again, I will be re-entering the trade and placing my stop loss order below the entry point. This time, I will also send a notification to my subscribers.


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