Tuesday's Market Minute: Stocks VS Reality

It’s hard to recall a time in recent memory when equity markets felt more disconnected from reality. As America wakes after another night of unrest across the country – not to mention the ongoing Covid-19 pandemic – many traders are likely surprised to see futures are pointing toward a green cash open. Speaking more broadly, the S&P 500 futures contract has soared back up over 40% from the March lows after the coronavirus sell-off, confounding bears who were banking on dismal economic data triggering a downturn in markets. Trading is never an easy game, even more so when trying to make sense of which direction markets are going amid the challenging news environment. While heightened volatility can mean major opportunities, it can also be challenging and even dangerous for newer traders. Sometimes the best thing to do is simply to stick to the basics by strictly upholding your trading plan and carefully managing risk. It is critical to set stop orders and make sure to protect against major losses during times like these, as the bottom can drop out of the market with shocking speed.