Biding Time As Market ‘Bakes In’ Events

2021-01-06

What happens now?

U.S. elections appear to be settled, pending ongoing protests, and the presidential inauguration lies ahead.

Still, markets kept traders on their toes through mid-week, including a spike in the Dow today.

The Dow closed at 30,829.40 points to jump 1.44% (adding 437.80 points on the day). The Nasdaq dropped to 12,740.79 points for a .61% dip while the S&P 500 gained .57% to 3,748.14 points.

Simpler’s traders are keeping an eye on internal signals, despite positive movement following Monday’s pullback.

A twist in final election results could flush the market as the week closes, and internal setups are hinting at a strong pullback with a rally to follow.

Will the market test support? Will this scare the long positions? Will any run carry into next week?

No matter what is happening, traders don’t want to assume anything.

Our traders are focused on technical setups while watching for what may be on the horizon.

We’re watching bonds, SKEW, EMAs, index movement, and more internals. There is much to watch and a big year ahead.

Recent trades could be described as short-term bearish without fighting the ongoing long-term trend to the upside.

As the market plays out, we’ll take a deep breath, bide our time, and focus on weekly gains while waiting for bigger opportunities as the markets “bake in” all that’s happening in the next week or so.

A trading plan designed to compound weekly returns can allow for a tally at the end of year that proves profitable — like in 2020.

We Saw: U.S. political power shifting — 

  • Markets “baking in” fast-moving events
  • U.S. political strife not totally settled
  • Big tech takes a hit, Nasdaq stumbles

We’re Watching: For more direction, steady gains —

  • Avoiding any assumptions as market plays out
  • Key internals, technical setups without emotion
  • Setups in: TSLA, AMZN, AMAT, FISV