Macro Analysis

You find a great stock. Strong fundamentals. Solid technicals. Everything looks perfect. You buy with confidence.

Then, out of nowhere, the stock crashes. Not because of bad earnings. Not because the company failed. But because the overall market fell.

This happens all the time.

Legendary trader Steve Cohen said that 40% of a stock’s movement comes from the overall market. 30% comes from the sector. And only 30% comes from the stock itself.

Think about that for a second.

The broader market and the sector decide 70% of the stock’s movement.

Yet, most traders focus only on the stock. They analyze company financials. They check charts. But they ignore the bigger picture.

That’s a mistake.

A stock doesn’t move in isolation.

No matter how great a company is, it is still part of a bigger system.

If the market crashes, most stocks will crash.

If the sector booms, even weak stocks in that sector will rise.

If you want to truly understand why a stock moves, you have to zoom out. You have to study the market. You have to study the sector.

When the market is weak, even the best stocks struggle. When the market is strong, even average stocks perform well.

If you want to trade with confidence, don’t just study the stock. Study the whole picture.

Let’s learn how to understand the overall market and the sector.

Once you master this, you won’t just pick good stocks. You’ll pick the right stocks at the right time.