Stock futures slipped Monday after the Dow climbed 0.3% last week. That's point-three percent. The market moved less than the tip you leave when the waiter f*cks up your order but you're too tired to complain.
This broke a three-week losing streak. Wall Street celebrated like a man who finally parallel parked on the fourth attempt. The financial media wrote fifteen hundred words about it. Analysts appeared on television to explain what this means for your portfolio. It means nothing.
Futures then slipped because futures always slip after winning weeks. They also slip after losing weeks. They slip on Tuesdays. They slip when the Fed speaks and when the Fed stays quiet. Futures are just numbers that change color on a screen while you sleep so CNBC has something to talk about at 6 AM.
The three-week slide that preceded this monumental 0.3% victory probably had retail traders checking their accounts like divorced dads checking their phones. Down two percent, down another percent, down again. Then up point-three and suddenly it's a winning week. Time to buy more calls.
Technical analysis suggests the Dow formed a classic "barely moved but we're calling it a trend" pattern on the weekly chart. This is typically followed by the "moves the other direction for no reason" formation. Very bullish. Or bearish. Depends on whether futures slip or climb while you're reading this, and by the time you finish they'll have done both.
The gap between a three-week slide and a 0.3% advance is the same gap between your trading strategy and actual risk management: technically measurable but functionally meaningless.
Photo by Tyler Prahm on Unsplash
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