Can’t Stand It
On Monday, the Nasdaq opened lower and continued to drop
steadily in early trading. Then, it promptly reversed and after a brief
pullback, rallied throughout the day. This action has it closing well.
The S&P also reversed after trading lower.
So what do we do? Monday’s action provides additional
evidence that we remain in a choppy market. Further, the intraday
volatility was enough to take out all but the loosest swing trade stops. Of
course, I didn’t get stopped out. Why? Because I continue to stand on the
sidelines, waiting for opportunities. I figure, if the intermediate-term guys
can stay mostly in cash for the past two years, I can at least wait a few weeks
for conditions to improve.
No setups tonight.
‘Can’t Stand It’ Test
I am an optimist.* Having trouble pulling the trigger on a
trade has
NEVER been my problem. In fact, historically, I have a tendency towards over
trading, since I’m usually optimistic about the market moving in my favor.
However, over the past few years, I have found myself trading less and
less–waiting for real opportunities. How do I
“know” it’s a “real opportunity”? And, how do I live with my
decision on missed opportunities? Right before each trade, I ask myself the
following two questions:
1. Do I REALLY want to take this trade (i.e., does it
stand up to the “can’t stand it test“)?
2. If I don’t take this trade, can I live
with the market moving without me?
Best of luck with
your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
*In fact, I was going to be a pessimist but
I figured it wouldn’t work out.