Market Not Favoring ‘Big’ Trades?

2020-10-06

Is this the time to be looking for homeruns?

Market conditions the past few months opened opportunities for big trades (like John Carter’s multiple million-dollar trades in TSLA and a variety of six-figure wins among other Simpler Trading team members).

But the “feel” for the market has changed. Not every trade has to be the next “big one.”

Chart patterns appear to be showing more “no man’s land” scenarios where it’s prudent not to extend too short or try to load up the boat to the upside.

Setups may present themselves when there are violent moves up or down in this choppy market that can shift on the whim of the latest news.

Like today when the president tweeted about stopping stimulus deal negotiations. The Dow dropped more than 300 points, erasing earlier gains in the session.

Our traders are watching for patterns to unfold that will present solid setups with likely smaller trading opportunities.

There are times to press in a market that presents qualified setups and times to trade a little bit like the uncertainty is too scary. Current market conditions indicate a cycle where it makes sense to pause and watch for clear technical signs.

Uncertainty in this type of market underscores the need to be aware that trading is a probability game. There is no guarantee of being right when taking a trade, especially if a tweet storm strikes.

We Saw: Market uncertainty presenting violent moves — 

  • Monday uptick followed by wildly choppy session
  • Stimulus political bickering intensifies
  • POTUS tweet takes air out of airlines’ wings

We’re Watching: Shifting pattern for setups, size of plays —

  • Best way to hedge against any killer tweets
  • For next run into earnings as a positive play
  • Setups that avoid sudden session crashes