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The market is looking for a direction here. For the past month,
we have been going absolutely sideways between the 1635 support on the NDX
and the 1710 resistance. The market is doing the two step with two steps
forward and one step back. Almost every day, the market is switching
directions, which makes for a very choppy market.
We hope that you have listened to our constant warnings about
the danger of swing trading a choppy market, it would have saved you a lot of
money. We have had some great trades in the last week, such as ELN and KG,
but the rest of the market was choppy.
You, basically, have two choices when the market gets choppy:
1. You can sit on your hands, wait for it to decide on a
direction. This is the more conservative approach, but it requires much
patience.
2. You can trade the choppy market, but you have to adjust your
trading and expect to feel some pain. Choppy markets do just that, they chop
you up. That means quicker profits and quicker losses. It means quick profits
turning into small losses and back to quick profits. You must be very careful
when trading a choppy market, adhere to your stops and reduce your trade size
significantly.
We hope to see the market break out of this tight range and
start moving with more momentum soon. Remember that momentum is conviction
and the market is just not convinced right now.
Hope this helps,
Shay Horowitz - ShogunTrading
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