The Market Looks A Little Ominous But Be Careful Not To Chase Your Own Tail – Dave Landry on Trading

The Market Looks A Little Ominous But Be Careful Not To Chase Your Own Tail

By Dave Landry | Random Thoughts Random Thoughts

The Ps didn’t come unglued but they did lose over ½%. This action keeps them stuck in a sideways range. Futures are very weak pre-market so it looks like the Ps will challenge the bottom of their range-at least on the open.

The Quack was also soft. This action has it stalling near the top if its shorter-term trading range. As I told my peeps, Tuesday felt like there was a little too much euphoria based on just a rally in Apple. And, on Wednesday, the market went right back to “now what?”

So the Quack stalled at the top of its range and the Ps look like they’re going to challenge the bottom of their range. Is it time to run for cover?

As I often say, when a market is in a range, you have to be careful not to chase your own tail. Near the top the range, it’ll look great. Near the bottom of the range, it’ll look a little ominous. You have to be careful not to anticipate the breakout or breakdown. Even if you do get it right, range breakouts often fail to follow through, and: Follow through is key.

Previously strong sectors continue to lose momentum. Retail is the latest victim here. We could see shorting opportunities here and in other previous high fliers soon.

On the up side, Metals and Mining turned right back up. We could get another buying opportunity here soon. Consider yourself warned: commodity based stocks can be really tough to trade.

So what do we do? With the big blue arrow pointing more and more sideways, we remain mostly in “wait and see” mode. Again, follow through will be key. As I have been saying, we are in a stock pickers market. And lately, there hasn’t been much worth picking. There’s nothing wrong with that. Do nothing when there is nothing to do. Write that down. Years from now, you’ll look back at a string of trades made during less-than-ideal conditions and realize that you maybe you should have just waited it out a little longer. Of course, you can take my word for it and thank me now. You’re welcome. Considering all of the above, make sure you really really like a setup before diving in. And, of course, wait for entries.

Come to the chart show!

Best of luck with your trading today!



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