Why patience is sometimes the best trading strategy.
Atualizado
I recently did a video to highlight the key levels to watch on the S+P. There is a convergence of resistance at 4017/83 (this is the location of the one-year downtrend, the 55-week ma and nearby resistance). I explained that success or failure at this key zone would be critical for direction over the next few months and this zone should go on your radar.
I was accused of sitting on the fence and not giving a view. That was actually deliberate, for while I acknowledge that the overall trend is down and in theory ‘the trend is your friend’ and the market should fail here… there are 2 things on the chart which are nagging at me. The first is that despite a plethora of resistance this market is not backing away and the second is that I have a buy signal on the DMI indicator (admittedly the ADX is NOT above 25 so it is not a decent buy signal) BUT the +DI remains stubbornly above the -DI…..mmm…sometimes your best friend is actually your gut, or for me, 35 years of looking at charts gives me enough reason just to be cautious.
So, at current levels there is not enough reason to cut out any long-term short positions (the downtrend and resistance remains intact after all) BUT I also cannot jump up and down and say this is a good buy either (as I say that pesky resistance remains) so from my point of view the safest way to trade is to sit tight until the chart gives you another signal.
Call this sitting on the fence if you must, but sometimes the best trade is just patience.
Disclaimer:
The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
I was accused of sitting on the fence and not giving a view. That was actually deliberate, for while I acknowledge that the overall trend is down and in theory ‘the trend is your friend’ and the market should fail here… there are 2 things on the chart which are nagging at me. The first is that despite a plethora of resistance this market is not backing away and the second is that I have a buy signal on the DMI indicator (admittedly the ADX is NOT above 25 so it is not a decent buy signal) BUT the +DI remains stubbornly above the -DI…..mmm…sometimes your best friend is actually your gut, or for me, 35 years of looking at charts gives me enough reason just to be cautious.
So, at current levels there is not enough reason to cut out any long-term short positions (the downtrend and resistance remains intact after all) BUT I also cannot jump up and down and say this is a good buy either (as I say that pesky resistance remains) so from my point of view the safest way to trade is to sit tight until the chart gives you another signal.
Call this sitting on the fence if you must, but sometimes the best trade is just patience.
Disclaimer:
The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
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