More On What To Do With Your Hands
By Dave Landry | Random Thoughts
Random Thoughts
It is deja vu all over again: The S&P closed at all-time highs. Ditto for the Rusty. The Quack closed at decade plus highs.
And again, the market is making new highs. As a trend follower, you can’t fight it.
Many sectors that looked like they were running out of steam coming into Monday turned right back up.
So things continue to improve. Does this mean that you should jump on mid-stream? No. The market remains overbought and due to correct. As I have been saying lately, overbought environments create a damned if you do and damned if you don’t dilemma. If you buy, the market corrects, if you don’t, the market becomes even more overbought.
Since the overbought market became even more overbought on Monday, nothing has changed. Therefore, considering the above, I still think keeping your hands in your pockets is still the best course of action for now. If you feel like you really have to do something, maybe put one hand in your pocket and with the other, make a peace sign (Isn’t that ironic? Don’t You Think?). The good news is that since the methodology requires a pullback, there aren’t many meaningful setups at this juncture. Wait for setups. When they occur, wait for entries. Once triggered, honor your stops. These simple techniques will help to keep you on the right side of the market and take you out when you are wrong. See recent webinars and columns on portfolio ebb and flow.
Futures are flat pre-market.
Best of luck with your trading today!
Dave