Breadth, valuations, and global liquidity matter more than headlines. A structured checklist before you chase momentum.
Context matters
Index levels tell you the score, not the health of the market. When indices grind higher, check participation: are advances broad, or is a narrow sleeve of names doing all the work?
A simple checklist
- Breadth — new highs vs new lows across the universe you actually trade.
- Liquidity — can you exit size without moving the quote?
- Risk budget — if margin of safety shrinks, size should too.
Discipline beats conviction when conditions change.
This is general education, not investment advice.