What To Look For..

The end of the day action this week was interesting with large moves in the last two hours of trading. Monday trended up with increased buying later in the day. Tuesday actually gapped slightly up showing signs of life but sold off hard close to the bell. Wednesday the market was a roller-coaster with a buzzer-beater pop that was caused by a trading error. Thursday was fairly stable but trended up at the end of the day.

The week ended with a free fall in the last two hours of trading. Each index shaved off over 1% causing the week to be in the red for all three. Next week look for more of the same and keep an eye on the charts. The trend is downward. It would be foolish to think that weak buy signals are a sign of a reversal. If the support that is currently being tested holds and the market rallies then the trend would reverse. Watch the RSI and MACD to confirm the upwards price movement. Until it does, and I don't think it will next week, there is only one side of the market I would want to be on. Look for the open to be higher Monday withstanding any market-moving news.

The volatility does provide traders with greater potential for gains, but also losses. In a market environment like this it is important to stay focused. When making a trade always determine a stop but possibly take into account the increased volatility. It is important to follow your support/resistance levels and as always stick to some risk management. Just because the market went against you and you lost money doesn't mean it owes it back to you. Be ready for the next move - don't be blinded by your emotion and desire for revenge.

"Learn to lose your opinions - not your money."