How To Be Productive In This Market
I sent an e-mail to the subscribers of my nightly trading service yesterday
with a real simple message:
If you go back and look at the chart of the
S&Ps on an hourly basis, you will see a nasty trading range beginning
on or around 1/27…..the overall market is just not moving enough in order
for these positions to play out. So, until this range is broken, I see
no reason to keep playing. A break of 837 or 867 are the levels that
will allow for follow through.
Sometimes the best course of action is simply to do nothing. Unlike
other professions which call for diligent work from 9:00 to 5:00 in order to produce
results, trading places us in the unfamiliar landscape where doing nothing is
productive. We are in that place currently. Sure, there may a trade
or two on the opening, beyond that, I just am not seeing trades that offer good
risk/reward.
So now what? Kick back and be patient. When the market breaks,
the trades will be there, make sure you are also, fresh and ready to go.Â
If you continue to aggressively play the current market, it will likely
frustrate you so that by the time good setups appear, you would not be able to
see them if they jumped out and hit you.
Yesterday, Brice Wightman made a comment in Chris
Tyler’s column about the importance of finding that one good trade:
One of the nice things about trading is that if you
make a nice trade early on, it makes the rest of your day go much easier — and
sometimes you can even take the rest of the day off!
In this market, until the range is broken, if you catch
a fish, make sure that you are really selective after that.Â
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 886 | 1020 |
| 874 | 992 |
| **862** | 985 |
| 852 | 983 |
| **842-45** | 974 |
| **837** | 960 |
| 830 | 957 |
| 819 | *941* |
| *930* |
As always, feel free to send me your comments and
questions.