Market’s Song Creates Wild Dance For Traders

2021-02-24

The canaries are still singing in the coal mine of this market that regularly teases dire circumstances ahead.

Today’s surging numbers across all three indexes followed a “turnaround Tuesday” that didn’t start singing positive notes until late yesterday afternoon.

Following Wednesday’s session, the Dow closed at 31,961.86 points to surge 1.35% (rising 424.51 points on the day). The Nasdaq jumped .98% to 13,596.93 points while the S&P 500 rose 1.18% to 3,927.28 points.

The market appeared to rally in response to the Fed singing its own tune of cautious optimism that includes a stable dollar and low inflation leading a significant recovery if the pandemic is controlled. The Fed’s positive tone comes as the national debt continues to balloon higher.

The Fed’s tune and tone comes at a time when a volatile market has created new challenges for traders.

Simpler’s traders have shortened trading time frames for a day-by-day, decision-by-decision pace to continue riding this wild uptrend. This is the type of market meant for traders.

Will the market cycle again like last February and March? Was Tuesday a hard bottom? Is the Fed not accounting for significant inflation? What happens next?

There will be times when this market presents opportunities to jump on board and take advantage of fast moves.

Still, Simpler’s traders are working to “grind it out” in this market. They are cautious about those “rally canaries” going silent and are always watching for a shift in direction.

The goal is to work this advancing market from one decision to the next without overthinking or looking too far ahead.

We Saw: Tickers surge higher across the board — 

  • Market rallies on Fed continuing “support” policy
  • Dow rallies 400+ points into record territory
  • Politicians promise relief funding is on the way soon

We’re Watching: Bonds heating up ahead of inflation, economic boom? —

  • Surge in momentum among transports
  • Not fawning over fruit, but liking the alphabet
  • Setups in: GOOGL, NFLX, NVDA, SLV