In Volatile Markets, It Works To Fade The Move: PreMarket Prep Recap For March 10, 2020

Stocks are trading up on Tuesday, a day after one of the most volatile days in recent memory. The whipsaw action has traders wondering whether the bottom is in or if the worst has yet to come.

On Tuesday’s PreMarket Prep, co-hosts Joel Elconin and Dennis Dick cautioned against buying the dip.

“From day to day it’s very difficult to predict this market,” said Dick. “I will just say fading the moves has worked in both directions. It’s been a little bit better to fade the rip because the trend has been down, but [fading the dip] has worked multiple times here, too.”

This is still a battleground, and when you’re in battleground trading, it’s best to fade moves.”

Elconin took a little bit of a longer view, adding that there are still a lot of people sitting on profits from the past few years. Should they feel inclined to sell, it could create more downward pressure.

“If you look at the monthly S&P chart...in the overall perspective of markets even since 2016 people are still sitting on a lot of gains. Especially when markets are acting like this, keep your eye on the time perspective. If you’re hopping in here and buying the dip, there’s people who bought the dip a long time and are longer from much lower positions.”

For the full discussion on how to approach these volatile markets, click here.

Other Stocks Discussed On The Show

Some of the stocks also discussed include, with technical levels provided by Joel:

• Cypress Semiconductor CorporationCY (click here)
• Stitch Fix IncSFIX (click here)
• Diamondback Energy IncFANG (click here)
• O’Reilly Automotive IncORLY (click here)

Featured Guests

Nic Chahine, Options Expert, Writer of Create Income With Options Spreads and Sellspreads.com

Nic Chahine joins the show every other Tuesday to discuss the week's options outlook. He is also a Marketfy Maven and the author of Create Income With Options Spreads. Prior to trading full time, he climbed the ranks of the corporate finance world. Then in 2000, Chahine branched out with an internet venture as CFO/COO. The venture paid off well enough to allow him to start his own fund and pursue his passion: the stock market. Chahine also has a background in electrical engineering.

Nic’s full interview can be viewed at 33:02 in the video below or by clicking here.

Watch the full show or listen to the podcast below.

PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET here. The replay can be found on Benzinga's YouTube channel, and the podcast is on iTunes, Google Play, Soundcloud, Stitcher and Tunein.

Meet the Hosts:

Dennis Dick
Joel Elconin

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Disclaimer: All of the information, material, and/or content contained in this program is for informational purposes only. Investing in stocks, options, and futures is risky and not suitable for all investors. Please consult your own independent financial adviser before making any investment decisions.