Bulls Steaming Ahead Or Fall Correction?

Media pundits appear to be catching up to market action and sounding alarm bells signaling the possibility of a retreat.

All three major indexes struggled again today as this overextended market hints of living up to historically rough waters heading into the fourth quarter. More than a year has passed since the market experienced a correction of more than 10%.

Simpler’s team has been working through this scenario and maintaining cautious trading plans for some time. The current bullish trend has held strong while continually flashing signs of a significant pullback.

When, or if, this market gives way to a sharp slide remains speculation backed by internal signals and historical trends. The bulls seem to hold a reserve of steam to keep running higher. Any setback will likely be sudden and catch more than a few traders off guard.

Many factors are up in the air including future Fed action, U.S. political wrangling, pandemic issues, and tense world events. All these add to the uncertainty of September and October trading which has shown to be tough going historically.

Until the momentum shifts from one or more of these factors (or something unknown), traders in the Simpler community are leaning into bullish opportunities. The next two months could be crucial to traders wanting to close the year with a net gain account balance.

Now is the time to take action by applying cautious strategies, being selective to find high-probability plays, focusing on shorter time frames, and managing position sizing compared to account balances.

Many stock prices are “reaching for the sky,” and the flip side to this constant rise higher is the expectation that this elevator will head down at some point.

If the move is sooner than later, Simpler’s traders plan to ride out any drop and be prepared for the next burst higher from the bulls to close the year.