Trading With Patience For Fireworks

2020-10-27

Today’s trading session was a little less irritating than yesterday, but still a sloppy endeavor.

It never ceases to amaze how the market likes to rear back and knock traders around… like the start of this week.

The market seems determined to explode like a fireworks display, but there’s no clear indication of whether it will implode to the downside or skyrocket for an upside burst.

While the indexes aren’t reliable barometers currently, there are squeezes forming within sectors and for individual tickers. The tough part for traders is the overall market appears stuck in a “hurry up and wait” pattern in the middle of earnings season and the presidential election just days away.

The current trading plan?... Move to cash and exercise diligent patience.

Cash protects accounts and patience is the old reliable strategy to avoid rushing into setups based on emotion.

Patience can lead to an edge in this environment and setups with an edge offer opportunistic probabilities of winning trades.

Certainly there are no guarantees or “crystal” clarity in this market, so plays become ever more valuable. Focusing on the “now” — shorter time frames — and letting go of any missed plays helps build patience.

Expectations are that indicators are leaning toward a market rally into the end of the week, but… today, again, didn’t offer much clarity. Patience provides comfort in waiting to see what the market can do tomorrow.

We’re watching for that spark to give the market a brighter outlook.

We Saw: Indexes not offering clear signals — 

  • Battle intensifies over social media influence
  • Politicians promoting partisanship, not stimulus
  • Market uncertainty over earnings, election

We’re Watching: Our personal patience meter —

  • Holding for clearer signals either direction
  • How strong it feels to be flat in cash
  • Setups that match “opportunity trading”