The longest day of the year has arrived but most of Europe has already been sizzling for the past few weeks. Down here in Spain we regularly have been touching the 35 Celsius scale which is about 95 Fahrenheit for all you metricphobic North Americans. Although I love to bitch about the cold during the winter what really irks me the most is the insufferable summer heat here in Valencia which unfortunately comes with a ton of humidity – we’re talking 80% plus at times. Which is quite different from the dry desert like heat I had gotten accustomed to living in California for about 20 years.
At least once per year markets across the board for some reason flip into a sideways high volatility period I call Lucy Van Pelt mode. No matter what sectors you’re trading, no matter what symbols or what systems. You’re going to get stopped out. Not just once or twice or three times, but repeatedly and within a very short time period. Which is exactly what happened to me over the past few days. It’s frustrating but instead of getting upset I prefer to simply address the problem at hand. Which is me of course.
The best thing I ever did as a trader was to completely ignore the news and simply focus on my technical analysis and system rules instead. A policy that not only has kept me out of a laundry list of bear traps over the years but also allowed me to take advantage of entry opportunities while the majority of participants were left rubbing their backside.
Yes, we are already three days into May but this kind of analysis takes a good mixture of time, attention, caffeine, and inspiration. But I think your patience will be well rewarded as we’re going to look at some rather fascinating charts. Now two weeks ago I posted a quick update which suggested that we may be at short term lows (on a daily basis) and that a reversal to the upside had good odds. Which is exactly what happened the Monday after when equities painted a big gap higher. You’re welcome, but thanks don’t pay the bills, so instead just sign up as a paying member and we’ll call it even