Tweet *****Frankly, I have no clue about what to write. Many thoughts have crossed my mind about the markets and its direction, but really what is being reflected is the growing concern about tops. I think most likely we are all looking for something. Something to indicate a more solid direction; notice, that I said "solid". So the markets want more information, or more leadership and maybe more assurance that these times will march on the same road as before.
When I look at what lies ahead, the holidays come to mind along with the end of the year. The current unknown is whether the consumers will again open their wallets to reflect an optimistic outlook on the economy. Since it's a bit early to tell and since some indications are the opposite, we are feeling uncertain about the direction, therefore patience and tolerance is perhaps the best course of action.
One day there's going to be a correction, that is for sure, but no one will know ahead of time when that day will arrive or for how long it will last. Multiple top tests is a consolidation of a different kind. It may indicate a serious concern or just a time for taking a breather therefore temporary adjustment. Volatility tends to indicate profit taking and buying and ranges reflect how traders tend to see when each reaches the opportunity. We all know that opportunity is a two way street. Both buying (long) and profit taking (short) are opportunities for traders and volatility gives us more in each direction, even if nerve wracking.
So, it's a good time to look toward the indexes because noticing what they show to you may be at this time your most friendly indicator about what's happening. Be ready for a direction change and be tolerant of snaps. Notice the ranges and notice the supports along with the resistances. Markets are never one way or another they are always both and it's why I like to be ready for both, long and short. when I set up my charts and plays.
Happy Trading, Living and Dancing
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