Market Continues To Show Risk, Opportunity

2020-10-08

The stock market followed a mid-week rally with modest gains today to keep traders hopeful for a positive end to this week.

The Dow hit the 28,425.57 mark to gain .43% (rising 122.11 points on the day). The Nasdaq rose to 47.12 points for a .41% increase while the S&P 500 joined in with a .73% rise to add 25.06 points.

After two days of gains, traders would be wise to be mindful of headline risk — something dire in the news or social media — that sets the market tumbling.

While maintaining a cautious eye on media matters, Simpler’s traders are still leaning bullish on a market that has maintained an historic level of resiliency this year. Top trade performers so far have come from bullish picks for many traders.

As we’ve shared before, there is a constant watch on the broader market while narrowing focus to individual stocks showing high-probability setups.

Promising signals have emerged for specific ticker setups.

The difficulty is that sometimes traders suffer from a blessing and a curse.

The blessing is many more people appear to have time (or have made time) to watch and analyze the markets. The curse is essentially the same — lots of time — but it turns into being too jumpy about all the market uncertainty.

Proper setups in this environment that lean bullish can provide opportunities to track a setup, take a trade, and walk away from the volatile chop. This is a more long-term, bullish plan that some of Simpler’s traders are undertaking. It presents risk, so be cautious within your risk management.

Simpler’s traders are taking advantage of short-term setups that can carry significant risk. These setups are tracking the volatility of the market as it twists and turns heading into the election in less than a month.

Again, risk only what you’re willing to lose.

We Saw: Markets ignore political tussles to stay positive — 

  • Sector leaders call for more stimulus
  • Fed arguing against low interest rates?
  • Fate of airlines with fewer flights, layoffs, no stimulus

We’re Watching: Long-term bullish opportunities —

  • Short-term plays with higher risk against reward
  • Election volatility plays for fast gains
  • Sectors that yield high-probability setups