Market Meltdown: Inflation, Interest Rates, and High Valuation

Dear Traders,

Interest rates are rising, and that impacts the profit margins of banks. The lower liquidity means money is not as cheap as it used to be, and investors try to avoid high value companies (which often are focused on technology and represented in QQQ). As rates go up, banks’ profit margins go down, because they are borrowing money themselves and lending it to their borrowers, making money from the interest rate spread. Now, in today’s situation, less spread is available.

Although the market is selling off, many solid day trading opportunities are still out there. Brian and I discussed this interest rate effect in today’s recap, and I also explained my trade on MSFT. You can watch it here. My TNA position is now down over $1m, a mistake that I should never have let happened. But I am not the only person who is down really bad. Cathie Wood of ARK is probably not having a good day. Have a look here at how scary the ARKK ETF chart is from its highs of $160 just one year ago.

Last night, Thor did an amazing job discussing the technique involved in reading volume price analysis and reading the tape. The recording of his webinar will soon be available for all Elite members in the Education Center.

Tonight, for Wednesday Psychology, Mike will present a webinar titled: Build Your Trading Confidence with a Solid Pre-Market Routine. It begins at a special time of 8:30pm ET.

In this webinar, Mike will discuss how you can build your confidence going into the trading day by having a well-developed pre-market routine. He will describe the basics of a self-awareness review and how to prepare psychologically for the trading day, so that when the opening bell rings you will be ready to execute your carefully thought out in advance trading plan.

I hope I will see all of you in the webinar room tonight, if not in the chatroom!

To your success,
Andrew

PS: If you have not yet examined it, be sure to take a look at our free, web-based replay simulator here. While at the site, don’t forget to register for Aiman and Simon’s lessons, trade ideas, recaps, and webinars.