Working To Avoid Missteps Into March Close

2021-03-22

Monday was more mellow than manic as the stock market continued with an uptick in all three major indexes.

The Dow was near flat as it closed at 32,731.20 points to rise .32% (dropping 103.23 points on the day). The Nasdaq rose to 13,377.54 points for a 1.23% gain while the S&P 500 was up .70% to 3,940.59 points.

Traders are looking to tap into the uptick as the month dwindles down — March historically is bearish into the end of the month. This seasonality can lead to more chop and slop like last week.

Key sectors showed strength to open this week with squeezes building and more volume breakout. There has been so much volatility so far this year that Simpler’s traders will work the upside moves while avoiding rushing too far ahead. Signals indicate a slip from bullish to more neutral, possibly with a turnaround Tuesday looming.

Last week exposed a temptation to move too quickly before more defined signals. Emotional trades can leave traders on the wrong side of a move. It can be a maddening downfall once started.

Well-defined rules in a consistent trading plan help keep traders’ emotions in check. Simpler’s traders understand we are all human and sometimes we all can get ahead of ourselves.

Whenever traders identify an emotional tendency it is important to get back on track quickly and fall back on established trading and risk parameters.

Simpler’s traders know how crucial it is to examine the market as it is and make sure any plays mesh with established plans and rules. This helps keep emotional missteps more rare than common.

We Saw: Monday start the week off to the upside — 

  • Fed downplaying value of cryptocurrency
  • Promises of stimulus checks in the mail
  • Investors facing more taxes

We’re Watching: For a continuation of mellow Monday —

  • Which sectors show strength, offer plays
  • If indexes will hit new record levels sooner than later
  • Setups in: GOOGL, MU, SNAP, MMM, PTON