Headlines of a deal getting done in a phased approached had investors and traders alike push stocks higher. Volume jumped on the session indicating a jump in institutional activity. Early Monday morning news from the Chinese state media indicating the deal needs to be signed by both presidents prior to uncorking the champagne. The saga continues and will likely continue to be a dominant factor pushing forward. We are not out of the woods yet, but there are positives pointing to this market pushing higher. A continued focus on our risk management process and price action will allow us to take advantage of this stock market. Stay on alert and stay disciplined.

At some point, this market will move past this trade saga between the US and China. Most likely we will see a shift towards who will win the next President. We suspect it will likely turn the market a bit more volatile like it has in years past. The constant bombardment of ads will certainly be a true test of whether you will be able to ignore the noise and focus on price action. We are not going to try and handicap what the market will do given any scenario resulting from next year’s election. Our sanity is valued, and we will only drive ourselves into insanity if we jump down the rabbit hole. It may provide a bit of humor to some. However, we’ll simply choose to focus on what will help us gain our edge.

While the election is still more than a year away, we have a market to focus on in front of us. Now, we will contend with headlines regarding the validity of any deal and this market will certainly be at risk to anything negative regarding the deal. There are stocks setting up in buy points and as they hit those buy points Big Wave Trading will be all over it. Of course, we will have our position sizes and exits in place optimizing our upside. Too many get caught up in the buying aspect they forget how to get out of their position. Without a proper plan in place will open you to unnecessary risks including the risk of ruin. We prefer to stay in this game for years to come. Therefore, we employ a proper risk management system.

Since today is Columbus Day the bond markets are closed. Stocks, however, are open. Go out and have a great week of trading.