Walmart: Stepping Back from the Fear
See the world’s largest retailer’s recent selloff from an objective point of view
by Nico Isaac
Updated: February 26, 2018
For stock market investors and traders, the month of February could rightfully be renamed FEAR-bruary.
On February 2, the Dow Jones Industrial Average set the tone of gut-wrenching volatility with an ominous 666-point drop, only to be followed on February 5 by a nearly 1200-point drop, the market's largest ever single-day dive. Commence tsunami-sized ripple effects throughout the major averages and the biggest players among them.
Take, for instance, Walmart, Inc, the world's largest retailer. On Feb. 20, Walmart shares plunged 10.2% in their biggest single-day decline in three decades. The mainstream experts cited a bearish same-day online sales growth report as the reason.
What came next can only be described as a collective outpouring of dread, as these news items make plain:
- "Cash is King: The Harbinger of Doom?" (Feb. 15 Barron's)
- "As Stock-Market Rout Spreads, Investors Fear Markets Falling in Lockstep" (Feb. 5 Wall Street Journal)
- "Why You Should Panic About the Stock Market Volatility" (Feb. 9 MarketWatch)
But what if you had a context for the dramatic price swings, an objective gauge for anticipating those turns before the rug got pulled out from under? Fear would be replaced with foresight, and panic with preparation.
Here, we hand the virtual mic over to our chief market analyst and Trader's Classroom instructor Jeffrey Kennedy:
"I'm not a perma bear or perma bull. The market decides. This is one of things I enjoy about being a trader. I can make money to the upside when markets are rallying but I can also make money to the downside by being a seller.."
"The context provided by the Elliott Wave Principle allows us to separate ourselves from the fear which is currently ingrained in the market. One of the values I find with the Wave Principle is that it can tell me pretty much precisely where I'm right or wrong to the pip, tick or penny."
In his February 6 Trader's Classroom lesson -- recorded and released long before WMT's Feb. 20 disappointing online sales growth report -- Jeffrey referred to several technical indicators, along with the Elliott wave pattern unfolding on Walmart's price chart, and devised a likely near-term interpretation for the issue:
"The current weakness was a fourth wave pullback that still had further travel to the downside."
From there, Walmart continued to fall hard, culminating in the February 20 nosedive. The next chart moves price action forward to Feb. 23:
As for what's next, the February 21 and 22 Trader's Classroom provide a rare double feature on Walmart, in which Jeffrey examines WMT through the lens of RSI, stochastics, and Japanese candlesticks, confirming that his Elliott wave interpretation is fully supported by technical indicators.Take a minute to watch the following clip from the February 22 Trader's Classroom to hear a major part of Jeffrey's analysis. Simply press play and enjoy!
In Jeffrey's own words:
"Walmart looks great not only from an Elliott wave perspective but also from a technical one."
At the end of the day, objectivity is the ultimate antidote for fear.
Become THAT trader who can see high-confidence entries, get in and get out with confidence — and sleep at night.
Several times a week, you meet with a market veteran and he's one of the most sought-after teachers in the world. He has dedicated his entire professional career to helping traders like you spot and act on high-confidence trade setups.
At every meeting, you watch over his shoulder as he shows you exactly how to spot your market opportunity. And he doesn't just teach principles. He uses real-life market opportunities to show you the telltale signs that a market is about to move. He also coaches you on how to create your trading plan for this setup — including how to estimate upside potential and identify risk-limiting price levels.
Sound like an ideal fantasy? Well...
THAT is exactly what Jeffrey Kennedy is offering you as a Trader's Classroom subscriber!