Range-bound markets have a way of getting traders to force trades, which rarely works. Avoid the urge to be in trades just for the sake of activity in this choppy market. Avoid the urge to place the big bet in hopes of catching the absolute bottom of this year’s down move. Avoid the urge to guess how the market will respond to earnings on a particular stock for the overnight home run. The fact of the matter is, for every home run you get lucky on (and earnings plays are about luck), there will be a number of strikeouts to offset that isolated success.
So, as we watch this market go back and forth and we wait for better signals that a larger move is coming, I want to stress the same thing I’ve been saying for weeks now: BE PATIENT! A lasting move, a REAL move will offer plenty of chances to jump on board and deploy capital into the market. Until then, resist the urge to be active and book giant profits, because they are much harder to find at the moment. Quality chart patterns are much harder to find in this environment due to the complete lack of momentum. Instead, begin to plan how you will react to market moves once they do arrive. That is likely the best use of time right now unless you are scalping the small moves intraday. Soon we will have our chance for swing trading larger and more aggressively, but right now the current environment simply calls for lighter trading and more planning.