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Here’s something that drives people crazy about the way I run my sessions: I won’t give you a conclusion until I’ve worked through the entire process.
I can’t just start with the conclusion. Let’s discuss why…
Someone asked me early in a recent session what I thought about the market. And you know what I told them? Before you marry somebody, you should first get to know their parents. You should know if they speak English. You don’t want to marry them — which is akin to the answer to your question — before you find those things out.
That might sound like a strange analogy, but it’s exactly how I approach trading. I don’t just give you a conclusion. I show you why I think what I think. And that requires patience — both from me and from you because this is a teaching and learning process.
The Systematic Approach to Market Analysis
During the session, I walked through my complete methodology step by step. I started with the bond market, then moved to Financials (XLF), then Semiconductors (SMH), and finally the S&P 500 (SPY).
Each piece tells part of the story, but none of them tells the whole story by itself.
One critical observation was the bond market’s lack of reaction, indicating a constructive outlook when paired with rallying Financials.
Only after examining every component did I synthesize the information. I was able to establish that the majority of the day’s early route was concentrated in chip stocks, not the global economy. That’s a critical distinction and one I couldn’t have made if I’d jumped to conclusions based on overnight price action or headlines.
What This Process Revealed
After working through bonds, Financials, semiconductors and the broader market, I finally gave my analysis. The three most important things to watch were whether the Magnificent Seven stocks came back into its range, whether the semiconductor ETF (SMH) found support at the eight-day EMA and whether SPY found support at the 50-day line.
The next time you’re tempted to make a snap judgment about market direction, resist the urge. Notably, the prevalent narrative around profit locking without noting potential losses illustrates why patience and a full picture are essential.
Build the complete picture first. Check bonds. Check Financials. Check sector rotation. Look at multiple time frames. Then — and only then — draw your conclusion.
Additionally, keeping an eye on specific levels can reveal if selling pressure is exaggerated.
I told traders not to panic because there was a good chance price would find support at these levels. But that statement only carries weight because of the analysis that led to it.
The next time you’re tempted to make a snap judgment about market direction, resist the urge. Build the complete picture first and you’ll trade with clarity instead of noise.
I hope that helps!
Roger Scott
Roger Scott Trading
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