Schneider Electric Drops 10%

Good morning!

Monday has arrived, and Wall Street is already giving off that “something is about to happen” feeling.

US stock futures are drifting lower, but nobody seems particularly eager to panic. Dow futures are down about 0.2%, while S&P 500 and Nasdaq-100 futures are also slipping.

The strange part? Stocks have been remarkably stubborn.

Bond yields are sitting at uncomfortable levels, with the 10-year Treasury around 5.28%. Brent crude is still above $100 a barrel. There’s also an ongoing war in the Middle East.

Normally, that combination would be enough to send investors running for the exits.

Instead, the market keeps hanging around.

Maybe investors are looking past the current noise toward earnings season. The calendar is fairly quiet this week, but Levi Strauss, Applied Digital, PepsiCo and Delta are among the companies reporting before Q3 earnings really get going in mid-October.

So this week could be less about economic fireworks and more about whether corporate America can justify these stock prices.

For now, Wall Street seems cautiously optimistic.

The bulls aren't exactly celebrating.

The bears haven't won either.

They're just standing across from each other, waiting for earnings to decide who gets the microphone.

🥇 Gold Edges Higher as October Fed Rate Hike Odds Tumble to 18%
Spot gold rose 0.6% to $4,165.49 an ounce as lingering sovereign debt worries and cooling expectations for an immediate Federal Reserve rate increase supported bullion. Money markets scaled back odds of an October hike to just 18%, though a 0.22% advance in the U.S. dollar index capped broader upside.

🚀 Elon Musk Adds $61B in Single Day as Fortune Approaches $1 Trillion
Elon Musk’s net worth jumped $61 billion on Friday to reach $979.7 billion, driven by concurrent rallies across Tesla and SpaceX shares. The 6.64% single-day net worth expansion pushed his personal fortune back toward the historic $1 trillion threshold on the Forbes Real-Time Billionaires list.

⚡ Schneider Electric Drops 10% on Record $22.6B Deal for Software Maker PTC
Shares of France's Schneider Electric slid nearly 10% after announcing its largest-ever acquisition, agreeing to purchase U.S. industrial software designer PTC for $22.6 billion. The transaction expands Schneider’s data center management and industrial AI infrastructure footprint, raising recurring software revenue to roughly 24% of group sales.

🛢️ Oil Slips Toward $101 as Rising Exports and G7 Stock Releases Boost Supply
Crude benchmarks declined on Monday, with Brent futures falling 0.71% to $101.59 a barrel and WTI sliding 1.2% to $90.05. Selling pressure accelerated as recovering Middle East tanker shipments and coordinated emergency inventory releases by G7 nations countered ongoing supply disruption concerns stemming from the Persian Gulf war.

📈 Wall Street Shrugs Off Multi-Decade High Yields as Rate Expectations Cool
U.S. equities demonstrated remarkable resilience despite sovereign bond yields lingering near 20-year peaks. The S&P 500 sat within 1% of its record high while the Nasdaq hovered near all-time peaks as a softer-than-expected September jobs report alleviated immediate fears of aggressive Federal Reserve tightening.

🤖 DBS Defends Nvidia Valuation, Saying 70% Growth Confirms AI Rally Isn't a Bubble
DBS Group Chief Investment Officer Hou Wey Fook affirmed that Nvidia’s price-to-earnings multiple remains fundamentally underpinned by projected 70% forward earnings growth. The wealth manager noted robust underlying data center demand proves the broader artificial intelligence buildout has not entered bubble territory.

🥉 Copper Advances for Second Day Following Softer U.S. Jobs Print
Benchmark copper contracts climbed for a second consecutive trading session on Monday. The industrial metal drew buying support as cooling U.S. labor market data eased expectations of near-term central bank rate hikes, improving the demand outlook for global manufacturing and infrastructure inputs.

A Good Entry Doesn't Fix Bad Position Sizing

You find a great setup.

The entry is clean. Your stop makes sense. The target gives you a good risk-to-reward ratio.

So you take the trade.

But you size the position based on how confident you feel.

That's where things can go wrong.

Position sizing is not just a number you calculate after finding an entry. It's a trading skill of its own.

A setup can be excellent and still damage your account if the position is too large.

One normal losing trade becomes a painful loss. A short losing streak becomes a serious drawdown. And once the losses feel too large, your decision-making can change.

You might move your stop.

You might close the trade too early.

You might take unnecessary trades trying to recover.

The entry and exit only tell you where you want to trade.

Position sizing determines how much the outcome matters to your account.

That's why experienced traders don't simply ask, "Is this a good setup?"

They also ask:

"How much should I risk on it?"

Your position size should account for your account size, risk limit, stop distance, and the characteristics of the market you're trading.

A great setup doesn't deserve unlimited risk.

Good trading isn't just knowing when to enter and exit. It's knowing how much to put behind the decision.

Zig Zag Indicator

Zig Zag Filtering Market Swings and Structural Turning Points. Source: VectorMine / Getty Images

The Zig Zag Indicator is a trend-filtering overlay designed to highlight significant swing highs and swing lows while eliminating everyday market noise. It places straight diagonal lines across the price chart, connecting extreme peaks and troughs only when price moves by more than a user-defined threshold (typically a 5% or 8% deviation). Because it filters out minor fluctuations, it reveals the pure underlying market structure, trend waves, and classical chart patterns without visual clutter.

🔴 The Red Zone (Downward Diagonal Ray / Lower High Formed)

• The Meaning: The Zig Zag line slopes downward from a confirmed peak toward a new low. Once the threshold is met, the tool locks in a swing high, confirming that sellers have forced a substantial trend pullback.
• The Move: Protect capital. In trend-following systems, a confirmed downward leg indicates an active retracement or trend reversal. Avoid entering aggressive longs until the downward leg finds support and the price begins pushing back above the reversal threshold.

🟡 The Yellow Zone (Inside the Current Unconfirmed Leg)

• The Meaning: Price is fluctuating along the most recent active ray, but has not yet exceeded the required percentage deviation to print an official new pivot point.
• The Move: Hold and wait. Crucial Rule: The most recent leg of the Zig Zag repaints in real time until a decisive reversal occurs. Do not trade off the current unclosed ray alone, as a continuing trend will keep extending that line further up or down until the reversal threshold is officially cleared.

🟢 The Green Zone (Upward Diagonal Ray / Higher Low Confirmed)

• The Meaning: The Zig Zag line pivots and extends upward from an established trough, confirming a swing low. Buying volume has exceeded the minimum percentage threshold required to confirm an upward wave.
• The Move: Go! A confirmed upward pivot marks structural buyer strength. When aligned with higher highs and higher lows in an established trend, this confirms a fresh impulsive wave to ride.

🔍 Two Simple Signals to Watch

1. Market Structure Breakdown (HH/HL vs. LH/LL)

The Zig Zag is the ultimate tool for objectively reading Dow Theory market structure without getting tricked by intraday wicks.

• The Logic: In an uptrend, watch for the Zig Zag to print a series of Higher Highs (HH) and Higher Lows (HL). A major trend reversal signal occurs when the Zig Zag breaks this rhythm by printing a Lower High (LH) followed by a break below the prior confirmed trough (Lower Low), confirming an institutional trend shift.

2. Elliott Wave & Harmonic Pattern Anchoring

Because manual wave counting and Fibonacci retracements are often subjective, traders use the Zig Zag as an objective anchor.

• The Logic: Use the confirmed vertices of the Zig Zag lines as anchor points for drawing Fibonacci retracements or identifying Elliott Waves (Waves 1 through 5) and chart patterns (Head & Shoulders, Double Bottoms, Gartleys). This ensures your fib levels and measured targets are tied to mathematically validated swings rather than arbitrary wicks.

💡 The Simple Secret

Think of the Zig Zag Indicator as wearing noise-cancelling headphones for price charts. Most technical charts are filled with confusing visual chatter—minor 1% bounces and dips that make you second-guess the trend. The Zig Zag turns the volume completely down on the noise, drawing clean, bold lines only when the market makes a real, heavyweight move of 5% or more.

Your Entry Price Is Not Special

You bought at $100.

Now it's $80.

And suddenly your entire analysis revolves around one number:

$100.

"Once it gets back to $100, I'll decide."

"If it gets back to my entry, I'll get out."

"It was worth $100 before, so $80 has to be cheap."

But here's the problem:

The market doesn't know you bought at $100.

It doesn't care.

That price only matters to you.

This is the Anchor Price Trap.

Your original entry has become an emotional reference point, so instead of asking what the asset is worth now, you're constantly comparing it to what you paid.

And that can completely distort your decisions.

Imagine you bought a stock at $100 because the setup looked good.

It drops to $90.

Then $85.

Then $80.

At $80, the question shouldn't be:

"How do I get back to $100?"

It should be:

"Knowing everything I know right now, would I buy this at $80?"

That's a completely different question.

Maybe the answer is yes.

Great.

Maybe the business, chart, or setup still makes sense.

But maybe the answer is no.

Maybe the reason you bought at $100 is gone.

The trend broke.

The thesis changed.

The risk increased.

If you wouldn't open the trade today, why are you still holding yesterday's decision?

That's where anchoring gets expensive.

You stop managing the position that's actually in front of you...

...and start trying to rescue the position you wish you still had.

I knew a trader who refused to close a losing position because he was "waiting to get back to break-even."

That phrase sounds reasonable.

Until you realize he'd never use it on a new trade.

If he weren't already in the position, he wouldn't touch it.

But because his money had already been committed, he couldn't see the trade objectively anymore.

SUNK COST HAD TURNED INTO A TRADING PLAN.

The same trap works with winners, too.

You sell something at $50.

It runs to $70.

Instead of evaluating the market at $70, you think:

"It was good at $50, so I'll wait for it to come back."

Again, the old price becomes the reference point.

But markets are about current information, not emotional history.

Your entry is a fact.

It is not an argument.

So the next time you catch yourself thinking, "I just need it to get back to my entry," stop there.

Ask:

"If I had no position right now, would I buy this at today's price?"

If the answer is no, your original entry may be making the decision for you.

And that's a dangerous position to be in.

Because good trading isn't about getting your money back to where it started.

It's about making the best decision from where you are now.