Panic Then Rally Up… ‘Can’t Fight This Squeezing’

2021-08-04

The market opened once again to uncertainty and a fast pullback.

If recent history holds true, the bulls will wrestle control and push the uncertain indexes higher once again.

How do traders ride out this continuous seesaw?

For Simpler’s team this market is all about the squeeze.

The major indexes opened weak for the mid-week session before scrapping higher into the close. Daily charts showed that this pattern — almost the “norm” lately — could be an indication of a potential new high with any rebound rally.

What is important in this back-and-forth action is finding “leadership” in tickers showing that the bulls are still in charge. This can lead to trade setups into the seasonally bearish weeks ahead through August and into September.

Setups to consider could include the SPY exchange traded fund or large retail and Big Tech stocks showing strength through the current, and wild, earnings season.

Seesaw market action so far this week is giving a glimpse into trader psychology and market movement. Traders have revealed their panicky nature and the market has shown resilience moving higher despite sudden pullbacks.

Attempting to take advantage of any weakness — trader or market — could prove risky for anyone not paying close attention to how this market lurches up and down.

Maintaining strong insight into the many squeeze patterns this market is producing has proven to be a safe play for Simpler’s traders.

We know all too well that the market takes away, and then it gives back… before pulling back once again to restart the cycle.

Simpler’s traders don’t plan to fight all this squeezing.

We Saw: Wildly mixed market across major indexes —

  • Dow, S&P 500 pull back, Nasdaq squeaks into positive
  • Etsy possible “canary” signal for e-commerce stall?
  • Robinhood continues ride higher with bountiful surge

We’re Watching: Leaning long, watching for short setups —

  • Culling dead plays with intent to reload later
  • Continued options for run into earnings reports
  • Setups in: GOOGL, PINS, DOCU, NFLX, PYPL