Last week I said we need a wash & rinse after another yoyo week, and what we got was … another yoyo week!
Optimal conditions will return, and for now the lot of the swing-trader is to sit tight and be extra vigilant with any trades you do make.
It’s not that money can’t be made in these markets … it can. And there are some decent post-earnings setups that I’ll highlight today. But the trade plan must adapt and be ruthless with any stocks that creep back into the breakout zone … which means a higher number of scratch trades.
I outlined that tweak to our usual trade plan last week, and the name of the game is always to ensure winners don’t turn into losers. It’s just that in these conditions we need to be super conservative about our winners.
Market Outlook
Crypt0 has been the fall guy over the last couple of weeks, but what we really want to see is that kind of action hitting the indices. Many tech stocks have already hit their 50- or 200-day averages but there is still a sense that the broad market as a whole needs to capitulate somewhat, so that the markets can return to more technical behavior.
We’re not necessarily talking about a major crash, more like a 20-30% hit from the highs, which would signify a decent clear-out. That said, there is a view that says the rotation from growth stocks (like tech) to cyclicals – rather than a wholesale exit from stocks – signifies an underlying strength in the stock markets, and a high likelihood of tech stocks rebounding strongly in due course.
And if that synopsis is correct, then it’s unlikely that we’ll see the 20-30% drop that would make life easier in the short term!
So, here’s what you have to do …
You have to keep in touch with the markets. Keep up to speed. Things can change pretty quickly, so stick to a routine of checking-in even if you’re not actively trading much.
Software Upgrades
- The speedier TradeFinder is noticeable and welcome!
- The new market timing indicator will take a few weeks to deploy.
Many more upgrades are to follow in the coming weeks.
Options Bootcampers
The strategy recognition code has almost been unpicked, so I’m hoping to show you that in the next 2-3 weeks in our first Mastermind session.
Package Deliveries Update
I’m hoping the fulfillment house will start to ship the replacement packages by the end of this coming week. I’ll let you know when the shipping process has started, and every package will be tracked.
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This week is one of those where you can take a rest … or play it very small!