Sleep Well While Preparing For Trading In 2021

2020-12-16

How is the Simpler Team sleeping well at night?

By avoiding the temptation of a market exhibiting an air of “certainty” when in fact there is an abundance of uncertainty through the end of the year.

Key sectors — such as transports — along with leading tickers — such as those in technology — are showing signals of riding a strong bullish momentum through the holidays. Where transports go the market tends to follow. And technology tickers have held strong overall throughout a difficult year.

So, why the air of caution when fundamental squeezes have formed across these sectors and tickers?

Because squeezes continue to gain energy and haven’t fired in any “certain” direction. Many unknowns remained to be resolved.

Larger players in the market appear nervous and are showing signs of hedging against the market rolling over… and wiping out anyone banking on “certainty.”

For Simpler’s traders, 2020 has been a volatile, long, and profitable year. Consensus is to move as close to cash as possible by the end of year and enjoy a break from this extended wild ride.

Traders may miss moves while dialing back, but at this point it appears a sound play to protect gains to this point while getting into a mentally right frame of mind before 2021 rolls around.

Risk is centered around higher probabilities — even with potential for lesser gains — without stretching into raising risk and “keeping your fingers crossed.”

The team is readying for an incredible 2021 by keeping a clear head to be relaxed and ready for the New Year’s challenges.

This is the plan to avoid worrying over “certainty” and “big plays” while sleeping well at night.

We Saw: Nasdaq strike an even higher record — 

  • Fed talking up a chipper 2021 outlook
  • Dow, S&P 500 losing ground slightly
  • Stimulus package talk of the town in D.C.

We’re Watching: Cautious setups and sleeping well —

  • Whether “certainty” holds or market rolls
  • Lowering risk while maximizing profit potential
  • Setups in: UPS, MSFT, NVDA, TSLA