Reasons For Keeping Cautious Rhythm When Trading

2021-09-29

The Tuesday sell off was confirmed as not the “big one” after the market rallied Wednesday across the board.

There seems to be no reasoning behind this market selling quickly and rebounding just as fast. But there is a rhyme to this market that is familiar for this time of year.

September and October historically are rough months in the market, and the third quarter is giving way to the fourth with a repetitious rhyme of drop and rally, drop and rally.

This is a time of caution for Simpler’s traders as drops can be difficult to navigate and any rally is suspect.

Last year August barreled toward fall as one of the best months ever for many of Simpler’s traders. The hard charge was quickly replaced with a rhythmic drop back down to Earth through October.

This fall, Simpler’s traders are expecting more of the same with the potential for a harsh sell off looming as the market rushes into October.

This is a familiar tune as any rallies this year into October are expected to be short-lived with pullbacks dragging the rhythm a little longer than might be expected.

Simpler’s traders are in no hurry to jump into just any move — the market can quickly bounce back to the averages before doing anything significant.

Our team doesn’t feel compelled to be a hero in this type of drop and rally market environment. From their many years of experience, our team members understand that it is OK to be flat and just watch what’s happening in the market.

They plan to spend time following movement in the indexes while sticking with tickers where the technical signals are holding up through this wild rhythm in the market.

While the bullish bias remains heading into the end of the year, making huge bets right now is not considered a safe play among Simpler’s traders.