≈ Know where the fire extinguisher is before the house is on fire. ≈

Traders,

Part of the education and application process of a trader is learning how to adjust to different market conditions. Markets do not always go straight up as has been the case since the November elections. At times we will experience bearish and neutral conditions too.

When the market is running, we want those good times to keep on rolling as long as they can but inevitably, we all the party will have to come to an end. With that thought in mind, traders should prepare for such a day even though we never know when that day will come. There are signs to look for however that indicate the market is about to make a shift. Look for slowing momentum, decreasing in volume on up days and higher volume on down days.

Bulls have been feasting for quite some time now while the bears having on the sidelines waiting for their turn. The test and break of the 50 MA the on the indices will awaken more bears as the bulls pack it and lock in profits on short term trades. This is not the time to start thinking of what to do as you are experiencing losses. Plan ahead, have action steps of what you will do when support levels are broken. Do not wait until the house is on fire to start looking for the fire extinguisher.

The good thing about bulls and bear is that we flip flop to the side that is winning. When the bulls are running, we run with them. When the bears come out of hibernation, you can join them too. Having the skill set to trade bearish conditions can help offset the losses you had when we markets turn. Take some time to paper trade and practice bearish strategies.

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Chart of the Day

QQQ weekly is testing the 20MA

It has been 18 weeks since the election and an extremely nice bull run but the markets are currently testing or approaching the 20 weekly moving average. Pullbacks are normal but we always want to wait for technical signals before entering. 

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Video of the day

What are and how to identify Bearish Down Trends

In this video, Coach Matt discusses downtrends and its patterns in depth by explaining candlesticks, resistance, and support.

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Traders Lounge 11 AM EST

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Halftime Report 12:30 PM EST

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At the Closing Bell 8:30 PM EST

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