Talk about lines in the sand! If you want a tight trading range, you got it.
Looking at the S&P chart below its tight and its a battleground. The upper line is defined by the closing high from April 12th and is the top of the range for 4 of the last 5 trading days. The lower line is defined by the closing low from April 16th and is the bottom of the range for 4 of the last 5 trading days. This approximate 1.6% range is whipping plenty of day traders around and will be the springboard for the next 2% move once it is breached either up or down. Until then, aggressive traders may be looking to play the upper and lower range for short term trading with tight stops.
Basically there is NO short term trend, with the intermediate trend being down and the longer term trend being up.
Whats the safe play here? If you are short term then nothing. Dont play the market here...its a sloppy rangebound trade that can whip you around and decimate your account quickly. If you have a longer term horizon stick with the trend that is within your horizon for risk. Personally, I believe the broad market needs to make another leg lower before putting in a bottom...ie wave C of an ABC correction.
No comments:
Post a Comment