≈ Fasten your seatbelts. ≈
On Monday, negative headlines can create huge waves of panic and the market can fall hundreds of points. On Tuesday, positive headlines can create euphoria as disaster might appear to be avoided. The market responds by going up hundreds of points. Too many traders attempt to make sense of this news and apply its significance to their day-to-day trading. When traders attempt to rationally determine the actions of an irrational market, they often get burned in the process.
On the television show Battlestar Galactica there was a famous saying that related to the major story line, “All of this has happened before and will happen again.” It is very easy to get caught up in the headlines of today and try and make sense of them in regards to your trading. Those that have been trading for decades realize that whatever news event is occurring now has happened before, and undoubtedly will happen again. The news may not be identical in nature, but the effects certainly are: hope or fear will be created, and the market will appear to be reacting to that news.
If you want to succeed in the trading game, then you need to separate yourself from these emotions. Do not attempt to determine how you think the market is going to rationally react to any given news. Let your knowledge of charting and technical analysis dictate your actions and you will be better off in the long run.
Chart of the Day
QQQ
The chart above is a weekly chart for QQQ (a popular ETF that tracks the NASDAW 100). With the mid-term elections this week the market could be in for another interesting week. The QQQs has not closed above any of the short-term weekly moving averages for over a month now and as long as these moving averages act as resistance downward pressure remains a strong possibility.
Video of the Day
Why Planning Doesn’t Matter in Trading (Unless you TAKE ACTION!)
Coach Noah Davidson talks about the importance of taking action in trading.
Today’s Lineup
Coaches Lounge 11am EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Halftime Report 12:30pm EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Market Recap 4:30pm EST
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
