Waiting For Moves Within The Ebb And Flow

2020-09-24

Trying to gauge market movement Thursday was like following a table-top version of the old arcade game “Pong.”

Stocks and indexes bounced low-to-high and back again throughout the session before finishing just ahead of flat. Finding setups was an ugly game of hit or miss.

Traders shorting the lows into yesterday’s close or early today were in a nightmarish panic by midday as the market churned into an uptick.

Simpler’s traders watched all the movement, allowing time to wait for the right moments for a setup and trade. The wild market movement ultimately limited trade possibilities.

Thanks to the uncertain back and forth during this strange week the default plan has been to limit pursuing individual stocks while watching the indexes. This is in line with the general thought that “so goes the indexes, so goes the market overall.”

Tomorrow is unknown and this year has already seen one major crash. Could another unfold around the upcoming election?

News and analysts tend to over-dramatize events “affecting” the market when in reality this wild phase is simply market movement.

Even though things look ugly, expectations are that power and money influencers (Fed, big funds, etc.) will want to keep the market afloat, if not moving upward, no matter the circumstances.

Simpler’s traders aren’t fighting any short-term pressure to the downside while maintaining a long-term approach leaning to the upside. There is a stronger focus on internal signals for any indication of upcoming market direction.

No need to panic and no need to get caught in “no man’s land” in an uncertain, choppy market.

Since the market doesn’t really go straight up or straight down, the play is watching for the right setups within these volatile ebbs and flows.

We Saw: Wild seesaw action across the board — 

  • Market showing no mercy on wrong side of plays
  • Nasdaq struggling with big tech stumbling toward turnaround
  • Serious chop flushing out weak trades

We’re Watching: For indexes to power the way forward —

  • Can Nasdaq break above 11,000 next week?
  • Any alignment to the long side
  • If internals reveal bullish uptick with strength

Does it make sense to “see” price moves before they happen? Learn about catching “pops and drops” in a volatile market.