Hey traders,
Today was a wild ride in the markets, and I’ve been getting a lot of questions about what’s going on.
If you’ve been paying attention, you know that the markets took a serious nosedive after the July jobs report was released.
Let’s break down what’s happening and what it means for us as traders.
But first let me say, yesterday I told you something was coming.
I don’t want to sound like I’m psychic, but there really was something in the air.
I can’t tell you exactly what it was, but after being in the markets nearly 40 years, I think I’ve developed some sort of sixth sense about these things.
I didn’t think it would happen the very next day, but sometimes that’s how the market goes.
Anyway, on to the analysis…
Jobs Report and Market Reaction
This morning, the July jobs report showed fewer jobs added than expected, and the unemployment rate ticked up to 4.3%.
Now, you might think a cooling labor market would mean the Fed would ease up on interest rates, but it’s not that simple. The market’s worried that the Fed has kept rates too high for too long, and that’s got people spooked about a potential recession.
We saw the Nasdaq fall into correction territory — more than 10% below its recent high.
The S&P 500 and Dow Jones also took big hits, with the Dow dropping nearly 1,000 points. It’s a clear sign that investors are jittery, and today’s news just added fuel to the fire.
Tech Stocks and Volatility
Tech stocks have been getting hammered, with big names like Amazon (AMZN) and Intel (INTC) leading the charge downhill.
Amazon’s forecast didn’t meet Wall Street’s expectations, and Intel’s — along with an announcements that they were suspending their dividend — were a bombshell, leading to massive sell-offs.
These are companies that folks have been betting on to ride the AI wave, but the lack of immediate returns is shaking confidence.
Volatility is through the roof. Now, I honestly don’t follow the VIX. That’s the Volatility Index.
I know that’s something you’re supposed to know, but it never made sense to me.
I personally think it’s “broken”. Especially since the introduction of 0DTE options, options that expire the same day. But that’s a story for another day.
Oil and Broader Market Concerns
But it’s not just tech that’s taking a hit.
Oil prices have tanked, too. The drop is tied to concerns about global demand, especially from China, where the economy is also showing signs of slowing down.
So, what does all this mean for us as traders?
Trading Strategy: Adapt and Thrive
First, remember what we talked about the other day — every market has opportunities.
When volatility is high, option premiums soar, which is great news for options sellers. This is a time to consider selling premium.
Second, keep an eye on those stocks that are still showing strength. In every downturn, there are companies that buck the trend. Focus on stocks that are still above their key moving averages, even if the broader market isn’t cooperating.
Finally, don’t panic. Market corrections are part of the game, and they can create great buying opportunities if you know where to look.
I personally think a lot of folks are going to wake up soon and realize this selloff just created some great buying opportunities. It could be Monday, the next week or it might take a little longer.
Whatever it is, stay sharp, keep your strategies flexible, and be ready to pounce when the time is right.
Trade well,
Jack Carter
P.S. Times like these are why I’m glad the majority of my investments are in dividend stocks. And I just shared my 3 Golden Rules for building a rock-solid dividend portfolio. Get them here — completely FREE!
