An absolute mess!

The price action this week has been an absolute mess!  Intraday whipsaw and daily overnight reversals have added a layer of complexity to an already very challenging market.  When markets go through choppy periods like this, it’s common for traders to lose substantial sums of capital.  It’s important for every trader remember that you have a choice.  You can continue to fight the chop giving up your edge and watching your account shrink, or you can stand aside protecting you’re capital until your edge returns.

Cash is a position, and in this choppy mess, it may be your very best position.  Trading is a marathon it’s not a sprint, and you don’t have to prove anything to the market.  If your frustrated and losing money then stop fighting because it’s very easy to compound the losses in this kind of chop.  Your edge will eventually return, and good price action will resume, but the question is will you have the capital or the confidence to take advantage of it when it does.

On the Calendar

There is no shortage of potential market-moving reports on this Wednesday’s Economic Calendar.  At 8:30 AM Retail Sales expect only a 0.1 percent gain in July due to weakness in vehicle sales.  Also at 8:30 the Empire State Mfg Survey expect a slight decline to 20.0 in August vs. the 22.6 July reading while the Productivity and Cost report looks for a gain of 2.5 percent.  The 9:15 AM Industrial Production report expects a 0.3 percent gain with manufacturing also moving up by 0.3%.  Business Inventories an increase of 0.1 percent and the Housing Market Index is expected to remain flat both coming out at 10:00 AM.   The unforecast EIA Petroleum Status Report is at 10:30 AM, and we wrap up this busy day with Treasury International Capital at 4:00 PM.

On the Earnings Calendar, we show only 38 companies reporting.  Before the bell, we will hear from M, and after the bell, CSCO and NTAP step up to the plate.  Stay on your toes even though earnings season has started winding down.

Action Plan

This morning the Futures are pointing another overnight whipsaw that looks to reverse yesterdays move higher.  Even though Turkey’s is in the midst of a serious debt crisis with there currency wildly fluctuating, they decided to put tariffs on US cars and booze.  I guess misery, really does love company.  Currently, the Dow Futures are suggesting a gap down of nearly 150 points at the open.

I have to say August 2018 has thus far become one of the most frustratingly choppy months we have experienced in a long time.  The daily gaps and intraday whipsaws this week has only added another layer of frustration and removed any doubt that a swing traders edge has left the building.  If you’re finding your capital is getting chopped up, its time to stand aside and stop fighting this messy price action.  Remember Cash is a position!

Trade Wisely,

Doug