If you have been following me a while you may already know this but depending on the type of the market we are in I change my expectations and trading style. There are two distinct market types in which I focus on in my personal trading.
# 1 – I have a bias on which way the $SPX (SP 500) is headed and therefore I will look for swing set ups that favor that bias. This includes long or short. We have not had any short biases in the market this year there has been very little of that.
#2 – I have no bias on which way the $SPX (SP 500) is headed and therefore I will set up on my hands and wait for the swing set ups to re develop. This is not to say I will not trade during these time periods but if I do my stops will be tighter and the set ups need to be better. More than likely I will be ‘flat’ though.
Going into next week I have no bias in which way I believe the market is headed and because of this, I am taking my time and being patient. This lack of bias came to me a little last Monday and was confirmed on Tuesday. I became flat on Monday and have been all cash since. I am ready to go back to swing trading but I have learned being patient is much better than trying to trade when your process tells you not to. The following chart is a chart of the $SPY (SP 500 ETF) it goes over some more of my thoughts heading into next week and the two pivots to focus on to see which way this range will resolve. During this time period create a list of strong and weak stocks so you are ready to pounce once we see some momentum/trend come back into the market. This type of action can last for days or weeks, so do not be in a rush to pick in the end of it. The time will come and price will tell you when.
Have a good rest of the weekend and remember, get outside, go for a run, look at some charts every now and then to create that list but don’t let yourself forget, the summer is coming to an end all too quickly. Enjoy it while it lasts.
$SPY chart with levels and thoughts –