If You’re Looking For Excitement You’re In The Wrong Place

Random Thoughts

Someone recently told me I’m not active enough and they were looking for more action. Never confuse activity with accomplishment. Trading is a business where sometimes, nothing is to be done. As mentioned recently:

“Remember this: When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.”

Jessie Livermore

Why are you trading? There’s only one reason to trade and that’s to make money. If you’re looking excitement then go to Vegas. At least there a pretty girl will bring you a drink while you lose your money. Nothing against Vegas, I enjoy a trip there whenever I feel like I have too much troublesome cash. The point is that if you’re looking for excitement in trading it is going to be a lot more expensive and a lot less fun that a trip to Nevada.

Let’s get to the markets. Well, same as it ever was. We’re still stuck in a range.

The Ps (S&P 500) tried to rally but came right back in, losing a little less than ½% on the day. This action keeps them stuck right in the middle of their sideways trading range, just about where they were nearly 3 months ago.

The Quack (Nasdaq) ended off its worst levels but still ended a bit lower nonetheless. This action keeps it also in the middle of its trading range.

The Rusty (IWM) ended down around 1/3%. Like the other indices, it too remains stuck in a sideways range.
In the sectors, a few areas such as Retail and Durables have recently broken out to new highs.

The Gold and Silver stocks still appear to have put in a bottom. Continue to look for buying opportunities here but wait for entries since so far the bottom has been more of a process than an event.

Crude Oil the commodity appears to have put in a temporary bottom. It has set up as a
“Pioneer First Thrust.” I think it’s worth a stab. Just remember, with pioneer setups, like the American Pioneers you’re either going to get the gold or arrows in your back. I think the risk to reward makes it worthwhile. I’m going to flesh this out along with a continued discussion on setting stops later today in the chart show. If you’re not busy saving lives or negotiating world peace then stop by. You might just learn something. I know that I always do.

Drugs and Biotech have slowed their ascent. I wouldn’t rush out and call a top here yet but you certainly want to honor your stops on existing positions and wait for entries on new ones.

Most of the rest of the sectors remain stuck in a trading range-like the market itself.

So what do we do? Other than the aforementioned commodity related areas that can trade contra to overall market there’s not a whole lot of action that should be taken. In trading, patience truly is a virtue. Continue to wait and not anticipate. Again, let everyone else fight it out. You’ll think me when you have plenty of fodder when the next big thing comes along. Just in case you forget, you’re welcome!

Best of luck with your trading today!

Dave