Three Patterns After a Market Drop

THE WEEK

The Market had gone down hard the week before with overnight gaps as prices kept plunging.  Monday was no exception as the gap down was even bigger to start the trading day.  And then prices reversed.  In all my different webinars (Quantum Trading Group, Investing Buddies and Mastering the Trade) I explained about the three possible continuing price actions the Market could look like moving forward.  I explained I don’t get overzealous with my trading until I have a clear picture of the next trend.  

Three emerging patterns to look for after a hard down

LOOKING AHEAD

Last week was the final week for this quarter’s heavy earnings  announcements when companies report their quarterly financial data and talk about their future prospects going forward.  Those reports do cause price waves in the Market as traders react to the reports

This week  the only Market disruptors are the PPI (Producers Price Index) on Tuesday and the CPI (Consumer Price Index) which reports on Wednesday.  Both reports are issued before the Market opens.  Traders do react to the reports.  However, I feel the reaction will be minimal and not last long.

HOW AM I DOING?

On Monday at Markets close I had almost a 2% gain to start the week.  I like trading the hard drops.  My problem was when the drop was over, I had to quickly adjust my trades for the new Market look.  As I said above, coming out of the down I was not sure which of the three Market looks would emerge.  The final gain for the week was only .4%.

One of the things I am most proud of in Investing Buddies is the continuing development of Traders who can think on their feet and react to Market changes quickly and efficiently.   A handful of my buddies have developed new ways to look at the Market with trades that take advantage of movement patterns.  One of the Investing Buddies stars is Tammy Barrett.  She will be presenting her newest trading style on this Thursday’s webinar.  

The TOTALLY SYNTHETIC TRADE