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The market recovered nicely from a soft open this morning, but the action is still highly challenging for traders trying to profit from riding any sort of trend. The good news is that a few more days of this type of flattish acton should go a long ways to setting up charts. I have mentioned that type of scenario previously, when I thought we were going to get that base building period at various points over the past few weeks. However, each time the market then proceeded to kick in another round of volatility. When price swings and volatility increase, looser and sloppier patterns on charts emerge, making high probability, low-risk entry points essentially non-existent for swing traders looking to hold more than a few minutes or hours.
Hopefully, we see a more benign period of action starting today. I cannot control if that happens or not, but I can certainly control how I choose to deploy or withhold my capital. I still have a few select longs that were barely down during yesterday’s broad market sell-off, which is encouraging. As Sinatra sang, nice and easy is the way to go with trading this market for now. I look forward to a period coming up where aggression is both strategically correct and rewarded.
I will be using today’s session largely to monitor which stocks, if any, are shaping up to be the best of the best.
A few more days of chop into a weekend surrounding the European debt debacle would be almost identical to the S&P August collapse…..
Not what the markets does but HOW it does it. Less volatility is better for bulls.
or the old Flintstones “Nice and Slow see, Nice and Slow”