Playing Market Upside With One Eye On Exit

2021-06-03

Just like a rough outing on the sea, this choppy market environment can leave traders a little green around the gills.

What’s ahead on the horizon — chop forever, climbing higher, or falling off the cliff?

Internal signals are creating chart patterns hinting at an explosive move ahead.

What isn’t clear is the direction.

Volatility is expected to continue — as it has for months — in the near term. No “scary” storms in sight, but anything could happen with various reports of job numbers, Fed meetings, and panicky investors worried about inflation and interest rates.

With the swell of uncertainty the indexes and key tickers are not revealing “defined” directional signals. Like a wave building at sea, all these factors lean toward a directional explosion but with no certainty of the strength or timing of the move.

As the market has shown, what lies ahead is not a case of “if” there is a pullback, but “when” will the market recede. Any drop could be deeper than desired with any unexpected economic event hitting the market.

Simpler’s traders continue to scan the charts across smaller time frames while searching for a stronger sense of what lies ahead. They remain nimble while making adjustments to fit what the market gives... trading day-by-day and enjoying the ride.

What is out front in this market is what is important, and Simpler’s traders keep taking gains as they can while waiting on the bigger moves.

The ongoing play appears to be to the upside... while keeping one eye on the exit door.

We Saw: Volatility rising along with tax plans, inflation fears —

  • Caution over “new reality” of spreading cyber attacks
  • Nervous traders wringing hands over job reports, Fed
  • Retail companies enjoying increased sales

We’re Watching: If inflation fears, panic change market direction —

  • Continued volatility thanks to jobs reports, jittery investors
  • If and when market pulls back before wild run
  • Setups in sectors, tickers holding through volatility