You Have To Adjust
As the markets continue to flirt with the
psychologically important 1100 level, it appears as though the selling continues
more as an orderly liquidation vs. a clear panic. This is certainly much
different than the sell-offs the market experienced just over a year ago. Is the
market "oversold" from a panic standpoint? Perhaps. The likely answer
is something I have eluded to several times recently: there just is not a lot of
participation on all levels. Institutional order flow is off, the retail and
professional trader have been reduced in numbers, or at the very least scaled
back their participation intraday.
This means one thing: adjust. Until the sharp volatility spikes come back,
your trading needs to conform to these new conditions. The first hour is
still where you can catch pockets of volatility, after that, a slightly
longer-term perspective is in order. While this approach is certainly not
foolproof, it is a practical. Look for setups on a 5-, 15-, or 60-minute chart.
The Durable Goods Order has just been
released, and it came in weaker than expected. As of right now, 5:30 AM PST, the
reaction has been muted. If you extrapolate this number forward, it certainly
does not coincide with those rosy prospects that "Street" economists
have been calling for. Let’s face it. The market is under pressure, and the
economy is not going to come roaring out of the gate. Adjust your
trading/portfolio accordingly. Gold shares continue to outpace all other
sectors.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 1119-20 | 1385-86 |
| 1116 (key resistance) | 1364 |
| 1105-06 | 1339-40 (confluence) |
| 1099 | 1319 |
| 1090 | 1300 |
| 1083 | 1288-89 |
| 1074 (contract low) | 1264 |
On Friday, the last piece of the four-part series on Single
Stock Futures (SSFs) will appear. This week I will be discussing some
of the strategies I plan to employ. These products have suddenly opened up
several more approaches that will not only complement my existing style, but
also offer a few stand-alone strategies. Click
here to see the first 3 installments.
As always, feel free to send me your comments and
questions. See you in TradersWire.