≈ Separating the known from the unknown. ≈

If you just started trading in the last couple of weeks, then the price action probably has your head spinning. The extreme gap/rallying price action is not common so on behalf of the market let us apologize for such a rude entry to the fabulous world of trading. 

Last week was an example of an unknown news event playing havoc on price action. There are two types of news events:

• Unknown News Events – Events that are unanticipated and essentially come out of the blue.
• Known News Events – Events that occur at an expected time and date.

We know when earnings are going to occur. We know when the Federal Reserve holds its meeting. We know when elections are, Fed speeches are planned and when economic reports are going to be released. What we don’t know is the unknown which includes President Trump going to Twitter to escalate the Trade War with China.

Day traders have longed known how to trade these types of known events and know how much money can be made on these volatile days. New short-term traders often get caught off guard by these events. Heck, even veteran traders can get their head spinning during such crazy price action. Fortunately, most events that impact the market are known, a few presidential tweets notwithstanding.

Chart of the Day

S&P 500 (SPY)

Extreme price movement both up and down during seemingly occurred after seemingly every day of this past week. After all the dust had settled the weekly 9-ema (as signified by the pink line) held on its first test since early January. While the first test of a major moving average is often successful each subsequent test weakens the moving average like a boxer in a title fight. How many punches can the 9-ema take in this environment?

Video of the day

Rookie Corner – Rules vs. Reaction

What happens when things go the other way and no such avenues present themselves to salvage our positions?

Today’s line up

Traders Lounge 11PM 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

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.

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