Why Worry About ‘Big Picture,’ Market Future?

2021-08-25

Staring at the computer screen at the opening bell with the prospect of facing another uncertain day in this market can be mind-numbing.

Traders often step back and take a look at the “bigger picture” to regain a proper perspective toward what to do next. Not a bad idea, but sometimes it makes more sense to dive into the market and search out a few detailed technical signals.

This “smaller picture” may yield surprisingly positive results for traders wary of checking their current positions. And help in the long term.

At Simpler Trading, our “smaller picture” mindset looks at pinpointing fall-back technical signals that inevitably lead to optimal time frames and squeezes preparing to fire.

The market has certainly changed. Trading styles and strategies must also change.

In the past, Simpler’s traders could readily follow daily and weekly charts to discover trade setups and formulate strategies. In the current market environment, this method often fails or leads to a continual “block” to expected trading strategies.

Simpler’s traders are turning to combinations of shorter time frames — daily, 2-hour, 30-minute — to follow the ebb and flow of the market. This allows entry and exit setups that might last a day or two compared to previously staying in setups for extended days or weeks.

The market always reveals that what happens tomorrow is anybody’s guess. A way to adapt to an ever-changing market for Simpler’s traders is to turn to the charts and technical signals and ask, “What makes sense?”

Our traders are also watching resilient stocks that might keep moving forward even if the market rolls over.

Certain tickers such as vaccine stocks tend to be moving along no matter market uncertainty and not necessarily moving with the indexes (which, despite recent upticks, are showing heavy overextension while leaning into sell signals).

Changes in this market have dictated adjustments from traders and that necessity of “rethinking” trading plans and strategies is expected to accelerate. While our traders dive into the charts and technical signals in this environment, they are looking at the “bigger picture” which may be revealing that the market will be changing in dramatic ways over the next decade.

As this market rumbles toward something bigger, the Simpler team plans to keep trading what the market gives… and work on being well-positioned for years to come.

We Saw: Yet again, another record-setting day in the market —

  • Nasdaq, S&P 500 hit new highs, Dow moves higher
  • Hedge funds rallying to boost short positions
  • Retailers continue to find avenues of profitability

We’re Watching: Adapting to uncertainty ahead of market changes —

  • Drones delivering more and more products
  • Expanding short interest opportunities
  • Setups in: SPRT, SNOW, CHWY