If you were watching the market yesterday, or really any day over the course of the last week, you saw some extreme indecisiveness that created heavy volatility.
But yesterday in particular was a perfect reminder of what matters most in the market.
Without it, even your best investments could suffer dearly. And I’d bet that very few traders and investors know about this…
Just take a quick look back at the benchmark S&P 500’s performance of the course of the trading day yesterday.
It’s really quite amazing.
After opening at 1,996, the S&P dropped through the floor down to 1,980 before ending up with an extreme surge that saw it close above the previous day’s close at 2,020.
What’s more interesting is that the initial drop took the S&P clearly below its longer-term 150-day moving average.
At that point it looked like we’re facing another big drop like we saw in October, which I’m sure you remember.
Yet, while in the middle of the day you could have been thinking it’s about to get ugly, just hours later everything back on track—even better than yesterday.
That’s why we have a special rule here at Wall Street Informer, which I’m going to share with you know…
Use the closing price to make decisions.
If you go by the closing prices, you allow yourself to both see the true sentiment of the market or security you’re inspecting, and you get to take some emotion out of the game.
Otherwise you face several risks that could be near fatal for any investor.
Almost every great investor will tell you that emotion is your biggest enemy on Wall Street.
By using the closing price, you simply give yourself an easy advantage.
