SPY is trading all over the place so far in the morning session here rallying and selling off handles at a time making things increasingly difficult for intraday traders to get a read on the markets intentions for the day. This to me feels like an ‘inside day’ which is a term we have defined in many of our past updates. Basically it’s a day that usually takes place after a significant reversal or move in the indexes where both sides of the trade get ruined from the choppy action.
Financials can’t catch a bid and many stocks are attempting rallies, enticing people into buying calls, and then dropping right back out. They’re all doing the same thing on the sell side as well. These are times where a trader must practice the art of NOT trading or adjust his/her strategy to compensate for the new environment. This means writing both puts and calls off of spike downs and spike ups, respectively. Basically you’re betting against the validity of a particular move.
The Precious Metals continue their move down after speculation arose on a possible end to the FED’s $85 billion monthly buyback program.
One must try to find the select names that are moving without the influence of the broad indexes or swallow their pride and take it easy for the day. I have chosen the latter.
Make sure to register for this evening’s webinar after the close! We’re going to help out a lot of you beginner traders today!
Stay tuned for more updates!
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