Jittery Markets Scrambling To Rotate

black android smartphone turned on screen

Image Source: Unsplash

It’s clear that the markets are jittery. One moment they’re gapping up, the next they’re gapping down, only to jump back up again.

In markets like this, it’s always a good idea to evaluate your approach to risk.

I liken it to sailing in stormy weather vs. calm weather. Which do you prefer?

Personally, I prefer calm waters.

Last weekend I suggested that this market has a big chance of a significant pullback – correction if you will – in the coming months.
The week we’ve just had did nothing to change my mind!

After last week’s drama with gold and silver, silver presented bounceback temptation for some traders I know … I didn’t agree, and it didn’t work out for them. This was a perfect example of a lack of structure punishing a gambling approach.

Earnings is still somewhat mixed, so it’s even more vital to be choosy. Our Earnings Calendar is doing a great job of unearthing some good post-earnings setups.

Market Outlook:

This earnings season continues to underwhelming even though the raw numbers suggest a bullish bias. A visual qualitative inspection tells a more nuanced story.

Medium term – after earnings – I still see a likely 10-20% pullback. This will need a confirmation signal though, so I’ll patiently wait, and if it doesn’t happen it won’t cost me anything.

Again, as per the last two weeks, it’s pretty clear that conditions are going to continue being bumpy, so my guidance continues for you to be super fussy, only go for post-earnings setups and don’t let profits slip away … Protect them early. Or stick to dry powder.

Our market commentary continues to be outstanding. Mastering market timing enables you to swim WITH the tide at the right time.

Watch the video for more detail.

Market Timers:

Longer Term Market Timer (OVIsi):
Green.
Medium Term Swing Timer:
Neutral.
The Main Indices:
The SPY and QQQ’s OVI are red, while the DIA and IWM’s OVIs are blue.

Stock Selection:

Our Earnings Calendar app is such a gift for finding earnings related setups. It would be even better if the markets were friendlier, but we can look forward to that.

This week my focus is again to ensure I avoid stocks with imminent earnings. Again, the Big Money Footprints I focus on most are OVI, Trend Fade and Key Levels. There are a few post-earnings setups, but risk control is a concern in jumpy markets.