Here we are an hour before the open and the stock market is up about .15%. It was a bit higher 5 min ago but the 5:30 report must have been construed as negative. Typically the first move after these reports are a fake out similar to the Yellen move yesterday. What you do not want to do is trade the first move off of a report. If you want to approach it for trading with trade the pullback after the first move or better yet trades the retest. You can try to pick where to jump in for the reversal but unless you’re a clairvoyant I would avoid that.
I am long a few stocks right now. Today it will only be the best of setups and if no follow through I will exit them day end of even sooner. Now is not the time to be extended for a 5-day swing trade unless it moves in your direction from the start. As far as mean reversion to the short side we are still quite away from considering that. It’s not even on the radar for me at this point.
When sentiment starts getting to where no one is cautious anymore that is the time to shift gears. Right now it’s only short term overbought.
It’s never easy to figure out the stock market Remember I said NEVER. So you have to pick a method that works for you. Start with one simple approach and stick with it. Then after it becomes 2nd nature you can add one more. To start out with 10 and try to manage all the nuances for getting it unless your Bobby Fisher.
In addition, the method should be one that is mechanical that requires no judgement. If I were to pick one right now to recommend starting with it would be Pullbacks in an uptrend. Saying that there are probably 100 techniques to trade that. But do your homework. Come up with one. Paper trade it for a month or two. Start off small. Then jump in and stick to that until you’re consistently producing profits.
My favorite is mean reversion for the stock market but that is not for starting out. The swings can be scary:)
I am putting together an article that points out the best techniques and where to learn them for trading the stock market. It’s all here, most for free, on the internet. You just need to know where to find them. As in most things, 99% of investment advice you get on twitter is dismal. It sounds great but in practice the opposite. But there are 1% of advisors on the internet that are spectacular in their approach, advice, and returns. I hesitate to give out that information as it took years to come up with. But I am working on it and when done will figure out what to do with it:)
In any event its back to the markets. I spent the last 1/2 hour responding to a political email something I know better about doing. Maybe I am losing my self-control:)
If you wish to follow my trades you can join my private twitter feed @rickjswings its free for now and will be for quite awhile.
Good Luck Today
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