Find ‘Honey Badgers,’ Avoid Dicey Moves

2020-04-02 | Simpler Trading Team

Traders faced a moody market that started with a thud before shifting up and down all the way to the close.

Oil was a big gainer — jumping up to 47% early — after the president announced possible reductions in overseas production.

The market responded with a jump, then repeatedly settled back or jumped forward within minutes of any movement. The Dow managed to close up 469 points following a disastrous start to the second quarter yesterday.

“Go to” setups and plans from Simpler Trading are ideal for this type of choppy trading environment.

“Honey badger” stocks — those that trend their own direction regardless of the market — were targets for Simpler’s traders. Identifying these types of stocks helps avoid the noise of news while targeting profit potential.

Simpler’s online trading moderators pointed out that large funds and government entities are working the markets long before the news cycle catches up to what already happened.

This follows in line with how the market followed an uptrend today after news broke of a shocking 6 million additional jobless claims and estimations that the next job report would also be negative.

Simpler’s traders pointed out that the market “bakes in” such statistics, and large hedge fund players can move the needle against the news cycle.

This is why our traders search out honey badger stocks, or trade the indexes when stock prices are all over the board. Indexes have more liquidity and positions can be entered or exited more easily than getting stuck in a stock moving against a trade position.

Traders are encouraged to trade what is working in this environment, and don’t get into anything dicey. Stay in your lane for good trading.

We Saw: a choppy market not kind to “newsies” — 

  • Oil gasping for a life line from the president
  • Shorts with too much exposure getting pounded
  • Almost half of all jobs gained in last decade lost in last two weeks

We’re Watching: … for strong movement outside the news cycle —

  • Companies in niche markets likely to fail
  • How long it will take people, companies to rebound
  • Tickers with potential: GILD, DOCU, ATVI, GDXJ, NFLX

Learn more about navigating news and the markets — check out the Simpler Trading community HERE.