Monday Likely Just As Manic As Choppy Friday

2020-02-28 | Simpler Trading Team

Watch and wait.

That’s the strategy of the day for the last Friday in February that saw the markets spike further down before trying to reverse.

News and politics give the impression the world — at least the stock market — is ending when reality shows this volatile flush is all part of trading.

While markets have dropped into correction territory, this coronavirus panic-induced drop doesn’t break into the top 25 worst five-day drops since the crash of 1920. To date this drop doesn’t match the fall in 1987.

Sentiment among Simpler Trading moderators on Friday was to maintain a strong cash position and wait for Monday. No need to take big risks with a choppy market and federal officials making all kinds of claims about the future.

As the market adjusts from an overbought environment, traders can watch for opportunities and let things settle or possibly turn over the weekend.

Will the Fed and world banks step in before Monday as the markets continue to contract? Only time will tell.

An uptick into the close set up an interesting start to next week.

We Saw: one wild and crazy trading Friday — 

  • Fed awkward warning sends markets clamoring
  • TSLA sill falling
  • Some stocks hit bear market levels: down 20% off highs

We’re Watching: … and waiting for Monday from a cash position —

  • Mental twister with a choppy market
  • Is the uptick a turn? Monday is a mystery...
  • Watching for setups in BYND, CRM, GOOGL, and SQ

Discover more about “orderly” trading -- learn how the “squeeze” guides traders.