By: Scott Redler
After last week’s bounce, or the “Best Week In A Year”, we feel this market will continue to require very active trading and profit taking. It may be a difficult market if you are trying to measure swing trades, but it is conducive to active intraday trading. If you want to be involved in the market right now, you must maneuver the ranges.
The indices are now only down around 3% for the year, but we’ve had 8 moves in 10 days or less of 5% or more. These big percentages are only for the S&P, if you look at individual stocks during the same time horizon, it could be 50% to 100% moves. Our mantra this year has been to “trade the range”. We anticipated it would take time for the world to sort through its excess and problems. In January we said the top of the market range could be 1230-1250 (we hit 1217) and downside could be 880-920. So far the market is acting according to the script!
We are now entering earnings season, after a 6-7% bounce off the recent lows. Now is a time to be very stock and sector specific. We are entering the “Have” and “Have Not“ period that requires extreme prudence.
