Market Uncertainty Makes For Wild Dance

2020-10-07

With never-ending uncertainty in the markets — rising high today, falling far tomorrow — there may be no better time to focus on high-probability trade setups.

Conservative plays backed by timely trade execution may be the nimble trading plan to keep from sitting on the sidelines while also avoiding getting ripped up by a volatile market.

Prudent traders may include a credit spread instead of a long call. Because how long will the latest uptrend last? The goal during this ongoing uncertainty is to increase odds of consistent income.

And, no matter which setup is tracked or trade taken, it’s wise to have an “eject button” in place with the very real possibility the trade could quickly turn against a given position.

There will be plenty of “dust ups” as this market moves forward. Each time traders will have to let the dust settle, see what the next round of setups unveils, and then target opportunities that fit within personal risk management.

The hope is that the markets will “normalize” sooner than later with stronger tickers and sectors setting the pace for high-probability setups.

Until then, the market will continue to lead this uncertain, wild dance.

We Saw: Market rebounding across the boards — 

  • All indexes up almost 2% on the day
  • Dow charges ahead with 530-point gain
  • Nasdaq, S&P 500 follow suit with rallies

We’re Watching: For sudden changes in this market dance —

  • Any high-probability setup to get moving
  • If politicians will actually work on stimulus plans
  • Setups that keep us dancing… safely