Another Day, Another Gap

The market once again has gapped at the open. This time, it was a huge move higher. The constant wild price swings can be frustrating for many traders and cause them to lose their discipline. I am at my best when I can look through the traps that the market sets, and instead focus on patience and risk management. It might seem quaint to say that, but I promise you that a market like this one has and will run traders right out of this business as their capital gets sucked into vacuum.

The financials look to be leading the market higher today. Keep in mind, we are in the last two days of both the month and quarter, not to mention we have a Jewish holiday. The real test will come next week, I believe. October has a reputation for being the infamous month of historic crashes in the market. While predicting a crash is almost always a fool’s game, plenty of people have been talking about this market crashing for several weeks now. If you have been extremely cautious like I have, then even a crash would not really affect you. The key is to heed the messages of the market. Here, no one can deny that we have a stock market that remains violently indecisive, with either a big gap higher or lower almost every day. Until that resolves, anything is on the table, which means most of my bets are off of it.