The Market has a fresh set of downs.  What team are you rooting for?  

A fresh set of downs for the market but which team will prevail?  As some of you know, I’m from Nebraska.  However, you may not know that I’m a huge college football, Nebraska Cornhusker fan.  No matter if the team is winning or losing every time they come out on the field with a fresh set of downs there is a renewed optimism.   I am unashamed to admit I have a Husker bias and always want them to win.  It’s a very good thing I don’t have any money on the line!

When the market has a fresh set of downs, and we do have money on the line, it’s natural to root for your team.  If you’re long on stocks, naturally the Bulls are your team and therefore optimistic of a win.  As a result, you have a bias, and it can affect the way you see a chart.  However, let’s not forget the Bears are still on the field and they have equally committed fans that want them to win.

As traders with money on the line, it is important that we step back from our bias and look at a chart objectively.  There are times when it is clear you’re team has the advantage and momentum to make you money.  To be consistently profitable and trade professionally we have to recognize and admit when the momentum has shifted and we can lose money.  For some traders that mean’s it’s time to switch teams and short the market. For other traders, it mean’s they should put that money back in their pocket, stand aside and just watch the game.

On the Calendar

Today on the Economic Calendar the only thing of relevance is Janet Yellen speaking at 4:10 Eastern time.  On the Earnings Calendar, there are 20 companies reporting today.  All in all a pretty boring market news day.

Action Plan

With the futures basically, flat this morning and the chart continuing to show that the Bears have the advantage of a downtrend my plan to be exercise patience.  Of course, I will be managing current positions and prepared for new trades, but I will patiently wait for the market to decide which direction.  Perhaps there will be news out of Washington D.C. that will inspire the market, but unless that happens, I’m expecting more chop.  Unless support or resistance breaks I honestly don’t think there will be much to do.

Trade Wisely,

Doug