One of my major rules since I became a profitable trader was not to let my trading be driven by news. The effects are significant but usually die off pretty quick. Unfortunately for me, that rule hasn’t really been true since November 2023.

I believe that traders need to identify rules that help them exploit the market and stick to them. Trading is a game of statistics, and while statistics don’t always play out right in front of your eyes, they are true enough over a long period of time. If you have a rule that says, “long if _” or “short if _,” and that rule has proven itself, it is my opinion that it should take a lot to make you forsake it.

All that to say, election cycles have a substantial impact on how markets respond, but this market rally is already stretched to extremes. Daily MFI is looking like it’s going to continue pushing past 50, but we’ll see tomorrow. If SPY finds support here, a bounce is likely. If not, the trend is officially changing and any rally is an opportunity for me to continue adding short positions.

I’ll have more details once we see where we open tomorrow, but I just wanted to preface my trading plan going into a new week.