Sunday, May 8, 2011

"Mixed Signals" and Charts Of High Interest

Been plowing thru hundreds of charts over the weekend and the if i had to conclude my findings in one phrase it would be : "Mixed bag and NO EDGE".

Am i confident the bulls are strong and taking charge here hence we need to be in LONG and strong? NO!

Am i confident the bears will take advantage of recent weakness in commodities and numerous "leading' stocks and take this market lower? NO!

However, as a trader who has traded many kinds of market environments, i cannot help but think that the recent "UNDER THE SURFACE" action i have witnessed lately is NOT the hallmark of a 'healthy' market. Just something to be aware and NOT to be ALARMED necessarily.


There are way too many MIXED signals right now making trading this sort of GREY area extremely tricky.

Over the past 3-4 weeks, i have really tried my best to minimize trading activity as things become more and more uncertain. My main concern right now is minimizing BOREDOM trades as much as possible.

One of my biggest assets as a trader is my ability of minimizing "BOREDOM trades" and NOT actively trading during CHOPPY/DIRECTIONLESS market conditions.

The bottom line guys: The HIGH quality setups are lacking. The commodity liquidation we witnessed last week along with several hedge funds 'blowing up' is throwing a big question mark into the equation. PATIENCE and having an OPEN MIND of what is to come is extremely important right now. We could slowly but surely putting in a major top here or we could be just shaking a few trees ahead of a massive rally into multi year highs.

This picture is very unclear and hence patience is very important.

1 comment:

stefanfekke said...

There is always tomorrow. Better no trade than a bad trade. If you say that to a trader, they all agree and still why are some of them not following that basic rule? The worst enemy of a trader is himself not following his own rules!

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