Here’s What To Do In This Choppy Environment
A real snooze on the
HVT front yesterday,
as it appeared that the markets were working off the big run up on Friday. The
key 1000 level was not breached and action was essentially sideways. With a
whole batch of economic reports on tap this week, it will note long before the
1000 level falls….one way or the other.
As I have been mentioning occasionally, it is
really not a question of if the markets will turn up, it is merely when. There
is enough liquidity, courtesy of the Fed, to get things going, however the
continued rout in bonds does cast some doubt. Bottom line: this is a trader’s
market, but even so, selectivity is key and you need to be on board each day and
simply let stop orders dictate your fate, there is simply no way to know which
day will trend versus chop.
I have received quite a few emails lately asking
what exactly I am doing in the current market environment. Great
question. While I am doing trades, the duration is longer than the standard
HVT set-up, perhaps many hours. With the
moves so sporadic after the first hour you will drive yourself nuts if you are
trying to fly in and out with HVT. The best
way is to pick your spots with reasonable stop losses and let it go.Â
Micro-managing trades in a choppy environment is a recipe for disaster and
frustration.
I still continue to stalk out Fade The Opening
Gap trades as well as volatility moves based on 10 AM economic numbers,
other than that, the trades mentioned above have seen me through just fine
recently.
Going into today’s session, it looks as though we
are going to make a push towards the 1000 level…yet again. Given the dearth
of short-term trades recently and the need to push the time frame out, you need
to consider a continuation trade above this level, especially on a move above
1005. While this may seem out of character from my usual style, it really is
not. Yes, for the most part the lion’s share of my trading occurs in the
HVT arena, but I always am monitoring or
playing on different time frames simultaneously. As mentioned above, the
Intra-Day Plays from
my service have been far more effective lately. A long above 1000 with an
E-mini or a representative stock and a reasonable stop loss is an idea worth
pursuing.
Due to technical issues, I am not able to post
the levels for the S&P and Nasdaq today. I apologize for any inconvenience.
As always, feel free to send me your comments and
questions.