It was just last Thursday when the S&P 500 was on the cusp of a breakdown.
Since then, it has been up, up, up. But only 13 points to show for the 3-day rally in the stock market. And each rally has been of mixed signals, with the Nasdaq down the first two days of the rally and the Russell 2000 being down today and the Dow-30 being flat.
Yesterday’s rally had horrible breadth for the bears with only 11 stocks advancing to every 18 stocks that were declining. I suspect we might see the volume pick up a little bit heading into the latter half of the trading week, but I wouldn’t expect much as the holiday week is still in full gear and a lot of people have taken the week off.
The thing is, you’ll be temnpted to make a trade, especially when the market is boring, because you feel like you need to be doing something. But don’t do that – don’t trade like that. Let the market come to you with the opportunities. Let the trade setups develop so that when you see them, you know, beyond a shadow of a doubt, that you should be trading that stock.
If you say to yourself, “I could probably trade that” or “Let’s give it a whirl” or anything remotely close to those phrases, back away form your mouse and think it over for 30 minutes, because that is when you are trading out of boredom rather than making strategic decisions that benefit the long-term profitability of your stock portfolio.
S&P 500 Technical Analysis
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