Market Action Over The Past 2 Months

As traders, It is VERY important to know what type of market you are in. It does not matter if you are a day-trader, swing-trader or longer term position trader. You need to know the market like the back of your hand. As a swing-trader, when there is no trend, there is no edge. As a day-trader, when there is jumpy/worrisome market like we have now, then there is a lot more intraday opportunity.

Since the March 2009 bottom, the majority of the time we have been in a grind up low volatility market, except for Summer of 2010 and Summer-Fall of 2011 (Present). Both times, if you tried trend-trading, you would have likely put on heavy losses as there was/has been no trend. In fact, as of today, since the market bottomed in early August, the same thing is occurring like last summer (2010)- a no-trend environment.

There has been so much roller-coaster action in the market, that I posted THIS chart to demonstrate how the action has been.  What I’m trying to convey is that if your are a swing/trend trader, don’t be a hero. Yes, you might not catch the resumption of the bull market trend (or the start of the bear market trend), but at least you will not get chopped up doing so.  Wait for pullbacks and/or consolidations to jump into the trend. Until then, sit back and play this market with smaller size.

Spdr S&P 500 

*Insipred by the @ReformedBroker ‘s TRB Joint collection
 
Tags: $SPY, $SPX, $DJIA, $DIA, $ES_F

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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