Sunday, December 9, 2012

Messy Market, So Keep It Simple

As I went through my scans tonight, I saw a ton of charts that I would best describe as being "messy".  Very few discernible patterns (bullish or bearish) out there.  This makes sense when you look at how the market is trading right now.   Last week was plain weird.   Seeing the Dow and S&P up with the Nasdaq down or vice versa is not normal market behavior and it seemed to happen all week.   One of the breadth tools I use tracking the number of 4% breakouts or breakdowns on heavier volume each day showed very little spread all week between breakouts and breakdowns.  Again, it's weird to see that for a whole week. 

We are currently in a very news-driven market, and those are very difficult to maneuver.  In markets like this, usually the best strategy is to either stay out or to keep things very simple.  That's what I plan on doing this week.  Since I see very few nice long setups (maybe MNST, CRM) and very few setups from last week acted well, I will simply focus on TNA this week.  It does move fast and it is setting up pretty clear levels from which to buy or sell. I don't have a problem going with a large position if it breaks one way or the other.   I would like to have some individual names but the market isn't presenting those opportunities in droves right now.  Again, keep it as simple as possible in difficult markets.   Good luck. 

Charts by TC2000, Courtesy of Worden Brothers, Inc.

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