This Is What The Market Does Best

by Greg Rieben October 05, 2019

It's amazing how two days trading can completely change not only the feel of the market but also the charts.

Tuesday and Wednesday's big down days might as well not have happened. Stocks as measured by the major indices (S&P 500, DJIA & NASDAQ) snapped back on Thursday and Friday and finished strong to end the week.

Now, instead of fighting to hold above support, some of the stronger sectors like software and semiconductors look like they might be ready to test higher levels.

Things sure "seem" like they change fast but in reality most sectors and major indices are trading near levels that we saw in the spring of this year. Little to no ground has been made over the last 5 months but it probably doesn't feel that way to most.

Choppy, sideways, indecisive markets are great at creating confusion among bulls and bears. This is what the market does best. It separates the impatient and impulsive from their money by forcing those without a plan to buy and sell on emotion.

Human nature is hard to fight. Everyone wants to be right. And by being right I mean trying to buy a bottom, sell a top or in this case correctly call the direction of the break out.

As I've said before I think it's best to have an I don't know mindset.

Trying to front run a market by anticipating a break out in either direction can be hazardous to your trading capital.

When the market does break out and shows its hand there will be plenty of time to participate and profit.