The Waiting Is The Hardest Part
On Thursday, the Nasdaq lapped lower and sold off hard.
Then after chopping around for most of the day, resumed its sell off going into
the close. This action has it closing poorly and once again, suggests its old
lows will be challenged.
The S&P sold off fairly hard. It too looks like it has
the potential to challenge its old lows.
So what do we do? Thursday’s action is keeping me off the
buy side in the indices in spite of recent (and repeat)Â buy signals. The
volatility (up sharply one day, down sharply the next) is still too high.
Further, it remains too choppy on an intra-day basis. If this downtrend
continues, we should start seeing setups on the short side soon.
More-than-likely these will occur in the weakest sectors such as the semis. For
now though, I still think the best thing to do is to continue to wait it out.
No setups tonight. If you are nimble (e. g. a daytrader),
look to play the buy side should the indices gap sharply lower and then show
signs of an early reversal.Â
Why Do You Trade?
The obvious answer is to make money. However, many
believe that’s their goal but are really trading for the rush. If you are
finding it hard to sit on the sidelines lately then maybe you are a “setup
junkie”. Rather than trade, why not get your “fix” by studying
historical market moves where the markets, sectors and stocks were all set up?
Then, wait patiently until you see similar scenarios unfold. I’ll bet you’ll get
the best rush you’ve ever had knowing that the odds are now stacked in your
favor.
Best of luck with
your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!