By: Scott Redler
We entered this year knowing that there was not a shot for this market to move like it did last year and that in order to make money and outperform the S&P, traders and investors alike would need to watch the complexion closely. Position management is key.
We like taking the easy trade, and then letting the market figure out the rest. Right now, the market is trying to work off the oversold nature of the latest move. I have attached three charts for reference.
The S&P: you can clearly see the uptrend break, and the creation of a new pivot now. We now have areas to trade long from, and areas to see if this correction continues. Pinpointing entries and exits is the key!
I have also attached a chart of Goldman Sachs (GS) to more specifically highlight some of these points:
U.S. Steel:
Every stock moves differently–and the charts are not the same. I posted a variety of charts in order to show examples of this phenomenon. It is important to gauge how well these beaten down stocks can bounce back, as the potency of the countertrend move says a lot about where to look for the next move.
