Will November Deliver Change In Trend?

2021-11-03

The month of November is off to a nice start. Simpler’s traders like what they are seeing with the technical indicators.

Structure looks good. Momentum looks good. Traders are still looking for a trend — other than this chop fest — that presents opportunities to add tickers to their watchlists.

The market does appear a bit extended — and that is a signal to keep on the radar. When the market ebbs and flows, it’s important to establish a position.

Is this the time to go long? Or are traders wise to wait for a pullback?

Simpler’s traders look for solid setups of structure, momentum, and trend to get past the nasty chop fest we’ve been in for quite some time. But, this market appears to be signaling that traders who want a big pullback could be waiting even longer.

So, the question of how to participate in this chop market — waiting for stocks to break out of consolidation and into a nice momentum — is on every trader’s mind.

When the market breaks out a move, Simpler’s traders can watch for entries as the previous resistance becomes support. Once the dip remains above the previous resistance, traders anticipate stocks to be off to the races.

While watching technical chart signals, Simpler’s traders continue to search the market for potential entries inside the weekly chop as they wait for a solid squeeze pattern.

The put-credit spread is a setup that traders can execute when the timing is right to capture potential trades in a market like this one where going long is difficult.

Traders use this type of option spread to utilize both short and long puts to minimize risk in a setup. The trader purchases two different contracts to exercise a put-credit spread — one focuses on premium and the other on the strike.

In markets such as this, this is the time to build a watchlist of tickers we can put to work when everything sets up for structure, momentum, and trend.