It’s relatively quiet morning thus far which gives us time for another exercise in tape reading. This time we are going to take a more in depth look at equities and cover a few tell tale signs that tell us if and when the market has transitioned into another distinct phase. Let’s start with the Zero:
A final reminder that equity futures have now rolled into September, which is the official front month contract for the next three months. Time flies indeed! Before I know it I’ll be shopping for Christmas presents again and bitching about the cold weather. In the interim we’ll have to earn our keep, so let’s see if the brand spanking new ESU7 contract offers us a decent entry opportunities:
Another difficult lesson to be learned as an aspiring trader or investor is that trending markets are either the easiest or the hardest to trade. Clearly it’s great if you got in early and your positions are flashing bright green. Otherwise it very much depends on your trading style and of course whether or not you managed to get a seat on the bus. You may prefer to wait for a confirmation retest before hopping on an unfolding trend, you may not get filled (it happens!), or perhaps you simply got kicked off just before it took off.
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.