Before your next trade, consider this
We got about 2 ft. of
snow at my house yesterday. Therefore, like the local schools, I’m
calling this one a “snow day.†Today’s column will be much shorter than usual
because I need to take my little boy sledding.
The market is all chop right now anyway. The Nasdaq and S&P are testing support
but refusing to break down. They are also refusing to rally. In other words,
there is no conviction out there. The market hasn’t yet made up its mind which
way it wants to go. Today was the lowest volume day of the year on the NYSE –
another sign of no conviction.
In looking through my charts this weekend I found a decent number of stocks near
completing basing formations that looked primed to break out. I also found a
decent number that looked primed to break down from inverse basing formations. I
have not seen good follow through on either break outs or break downs in the
last couple of weeks – rewards have been small for those that did “succeedâ€..
All this means is that the bias remains the same as it has been – neutral. Look
to play both sides but use caution. A second (and perhaps better) option would
be to go sledding and wait for the market to provide a more reliable edge for
trading.
Assuming we get a little melting along with some market movement I’ll be back
Wednesday with a bit more to say.
Good sledding,
Rob
For those who may be looking to expand their
knowledge beyond just market timing, my
Hanna ETF Money Flow System utilizes the VIX in generating trading
signals for spread trades.
Rob Hanna is the principal of a money
management firm located in Massachusetts. He has spent the last several years
developing and refining methods for trading in stocks across multiple time
frames. He selects stocks using both fundamental and technical criteria, and
then trades them using technical analysis techniques.