If the markets had any real intention of stalling and pulling back, today should have been the day. The Nasdaq futures came within three ticks of reaching the target of a four month pattern (after taking out a nine and a half year pattern earlier in the week) and promptly headed south. This wasn't enough to take down the S&P futures with it, however, and the markets found some traction and drifted upward as the day came to a close.
While the Nasdaq has outpaced the S&P 500 lately, it doesn't necessarily mean that a pull back in the markets is in the cards. The S&P futures' pattern still has room to run, despite the sideways chop it's been mired in since January 18th.
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| Two weeks of tedium |
It's not as though individual stocks are trading in the same manner as the S&P of course, as there is always something out there to trade. Money shifts out of one stock into another. There are plenty of opportunities for short-term traders, and the sideways indecision in the market does create some semblance of stability for other trades we may choose to enter.
The difficulty we face in today's stock market, unfortunately, is that it is more generic now than at any other time in its history. A stock may give an entry signal for a day trade and ... bad news from Greece! This type of thing has turned into a day trader's nightmare over the last few months. It is one thing to suggest the markets have already digested what's going on in Europe, but it's entirely another to think it won't have an affect on a short-term day trade.
Whether or not we agree or disagree, the facts are that day trading is not as stable - nor predictable - as it once was. It's tough and the markets are forcing us to work much harder for our money now than in the past. Is it wrong that Wall Street insiders know the news well ahead of us and trade accordingly? Sure it is, but that's the price we pay looking in from the outside.
There is nothing wrong with the markets that couldn't be cured if we'd just rid ourselves of our short-term, minute-by-minute attitudes. Take a look at the charts on the daily, the weekly, the monthly.
What's the problem?
Our attitudes and our belief that every lousy thing we read on the internet is true.
That's the problem.
Always perform your own due diligence. These are only my opinions.
