Tackle Today: Home on the Range
January 5, 2023
«Here are 3 tips to survive»
With Wednesday’s failure to pull the S&P 500 above resistance, we’ve now spent 12 days stuck in a narrow but whippy trading range. Worse yet, thanks to a stronger-than-expected jobs report, stocks are gapping lower this morning in a quick reversal of yesterday’s strength.
Until we get a resolution from this range, it’s impossible to have a strong opinion on the next direction of the broad market. Here are 3 tips for active traders while the neutrality persists.
1) Be careful leaning too far into bull or bear trades. If the market breaks in the opposite direction, it could get painful quickly.
2) Focus on individual stocks exhibiting relative strength or weakness. Not everything is mired in the mud like the S&P 500. Go bullish on stocks with relative strength and bearish on those with relative weakness.
3) Be ready to capitalize once the S&P 500 finally does pick a direction, as we could see swift follow-through giving easy profits to those on the right side of the breakout.
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Chart of the Day: S&P 500 (SPY)
Of course yesterday’s up day is followed by a down gap. ‘Tis the nature of a garbage market.
Today’s line up
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