The Year of Volatility 2018
If I had to sum up the year of 2018 into one word that word would be, Volatility! It’s been about a decade since the last time we’ve seen this level of volatility in the markets. After the 2008 recession, all you had to do is buy any S&P 500 stock and ride the nine-year bull wave as the economy recovered with no worries. Lots of talentless traders were able to generate massive amounts of wealth while volatility was in a deep sleep. Well you can kiss those times goodbye. Volatility has awaken with a vengeance. Before we head into the new year let’s take a quick review of what released the Kraken on 2018.
President Trump’s tax cuts took the markets to cocaine highs. Inevitably after cocaine highs comes super depressant lows and that’s exactly what happen in the last quarter of 2018. What happened you ask?
Well, the Feds aggressive interest rate hikes plus quantitative easing, President Trump’s Tariff war with China, and global markets meltdown are the ingredients responsible for this volatility cake. From February to March we got our wake-up call whiplash which killed a lot of arrogance in the markets. But the Bull spirit had more fight in it and rallied to all-time new highs from April to September. Corporations were blowing earnings out the waters, raising their own minimum wages and giving bonuses from that tax cuts that Trump awarded them. From September to December the markets just went to hell.
The Fed decided that it was time to cool this steaming hot economy down to avoid inflation disaster therefore continued its hawkish increase in interest rates. Decembers rate hike was one too many for investors so Wall St had a fit! Trump and Wall St began to beef with the FED over possibly sending the economy into a recession. I believe Wall St. was expecting a more dovish tone being that the IMF and World Bank released a depressing economic forecasts for 2019. The projection is that the world’s economy will slow down and this news sent jolts to the markets.
Earlier in the year, Trump signed new a trade deal with Canada and Mexico to send a strong message to China. China and the US have been playing chicken all year long but have since calmed down a bit after seeing the negative impact on the global economy.
Not good news for the countries already in turmoil around the world. We saw over 80% of global currencies fall in value. The biggest countries in Europe are having major debt woes on top of Brexit uncertainties. G20 conference gave little relief as President Xi and Trump eased tensions around tariffs temporarily.
The plunge of the oil markets brought relief to consumers at the pump through the holidays.
Democrats took control of the house of representatives priming their ability to thwart Trump’s agendas and possibly pursue impeachment. The Government shutdown over the Trump vs Democrats wall funding. Oh yeah, we can’t leave out the crash of bitcoin that ripped through the cryptocurrency markets leaving many Wall St enthusiasts to abandon the crypto world. It’s been one hell of a roller coaster ride in the stock market for all of 2018. The so-called experts have been losing money and some blowing accounts due to these unforeseen levels of volatility.
Drugs and gambling are things that people turn to when stressed out. With all this volatility I guess it’s of no surprise that we are seeing legalization of sports betting and marijuana. Maybe the markets needs cannabis to cope with the stress of everyday life LOL!
Although this may sound like a bunch of doom and gloom it’s just a normal phase of market cycles. The market goes through cycles of boom and bust like everything else. You must have perspective of the market environment before deploying your money to work. That prospective is one of the many benefits we offer at Wallstreet Jackboyz so if you are not yet a member join the squad and take advantage of the provided wisdom.
If you started your trading career during all this commotion and got your head cracked, I would like to award you with a purple heart for your wounds. You have paid for valuable market wisdom. A book can’t teach you how to navigate this current environment. You must be in it to experience it. Experience is our greatest teacher. So be encouraged that you have lived thru a historical volatile market and carry with you what you have learned into the coming years.
Now that we are closing this year, I encourage you to take the time to review your 2018 trades in your wallstreet jackboys trading journal. Like a business, the best way to improve performance is to review history and plan accordingly. Set time bound and actional goals to continue to improve on your trading journey.
If you have not been tracking your journey, I encourage you to begin this best practice starting 2019. It will provide you with valuable insight into your trading strengths and weaknesses. So, with that happy trading wallstreet jackboyz and girl. I wish you a very Happy New year!
Now that we are closing this year, I encourage you to take the time and review your 2018 trades in your wallstreet jackboys trading journal. Like a business, the best way to improve performance is to review history and plan according. Set time bound and actional goals to continue to improve on your trading journey.
If you had not tracked your journey, I encourage you to begin this best practice starting 2019. It will provide you with valuable insight into your trading strengths and weaknesses. So, with that happy trading wallstreet jackboyz and girlz and have a Happy New year!