Patience

We have all heard the phrase; Patience is a Virtue.  For the swing trader patience is a difficult but very import skill that each of us must learn to master.  To be successful in this business, we wait for the proper combination of patterns, price action, volume and volatility that provides us with an Edge.  That sweet spot where risk is acceptable and probabilities move in our favor.  Patience is also a test of endurance because the longer we wait, the harder it is to maintain the discipline of being patient.

The fact is traders just want to trade, but if we trade, without an edge, our capital is ripped from our accounts and given back to Mr. Market.  I won’t speak for you, but I think I deserve my capital much more than that Mr. Market.  Consequently, it’s essential that I master the skill of patience and develop endurance to wait for my Edge!  Are you willing to endure the wait or will you turn your capital over to Mr. Market?

On the Calendar

It would seem this Friday on the Economic Calendar is an FOMC speaker day.  At 10:15 AM Rosengren and Dudley speak with Mester at 1:30 PM and Williams ending the day at 3:40 PM.  The Baker-Hughes Rig Count at 1:00 PM is the only economic report today, and it is not expected to move the market.

We also get a break on the Earnings Calendar today with only 56 companies reporting.  The vast majority of the earnings reports occur before-the-bell.

Action Plan

We started the day with some bullish energy, but once again the bears mounted a counter-offensive that left all but one index seeing red.  At one point during the day, the Dow was up more than 300 points but gave nearly half of it back and once again closing below that big round number 25,000. The SPY ended the day in the red, closing below the 50-day average as did the IWM.  Yesterday was the 3^rd attempt in as many days for the SPY and the DIA to break through the 50 but thus far been rejected.  The IWM has experienced the rejection of the 50 SMA, 4-days in a row.  Even the QQQ, the strongest of the four indexes could on hold on to a positive print at the close.

While all that seems pretty bearish, there is a glimmer of bullishness because all four of the indexes are at least for now holding above significant price support levels.  The choppiness of the price action has made trading extremely challenging if on impossible except for the very fast intra-day traders.  By in large earnings reports continue to come in positive as does most of the Economic Reports.  As I write this, the Dow Futures are pointing to a gap up of more than 100 points, adding to the choppy confusion.  What all this means to me as a swing trader is that I have to continue to patiently wait until the intra-day volatility subsides and a discernable edge can be defined.  Long or short doesn’t matter just show me a direction.  Have a great weekend.

Trade Wisely,

Doug