≈ 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.
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.
Financial freedom is a journey
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.