Here’s my advice on trading in this environment – September 2, 2022
SPY
This selloff continues ( NYSEARCA: SPY ), there are just no real buyers here. So my suggestion is to trade what you see and not focus on seeing what you want to see.
This market is under pressure, I have no idea whether we are going to see that. Golly gee, wouldn’t it be nice, that’s an inverse head and shoulder reversal pattern. Or if it is going to do this or anything in between.
The point is, right now the 200-day moving average is drifting lower. That’s a market under broad selling pressure. The 50-day moving average had been trending higher but now, give this another week or so and you are going to see this drifting lower as well, as long as the price stays under the 50.
This is a really, really bearish configuration right here and I think it just bears caution. I have 1 stock, I have a little OXY ( NYSE: OXY ), the ticker, not the drug. I’ve got a little OXY ( NYSE: OXY ) in my trading account and that is it, and I’ve got a tight stop on that.
Other than that I am just kind of waiting out the carnage. I suspect, or I suggest that you do as well. The idea here is to be making money not just to lose less.
You want to be making money in this market. And if you can’t do that or if you aren’t doing that then you need to change tactics. You need to do something different, and one of the things you could do is just stop trading or really reduce your position size.
Be very, very prudent in your entries, don’t trade just to trade. Don’t get hyperactive trading. Just, if you see something and it fits your criteria work the trade. If it doesn’t fit your criteria the last thing you want to be doing is making an, oh, I think I will take a shot, trade. That’s not trading, that is just gambling with video games.
Free Chart