Volatility is back with a vengance. Bears have dived back into the market rippling the glassy pool of complacency that had dominated the market of 2013.
Violent indecision in valuations has provided some of the best intraday trading opportunities I have ever seen. The market seems to be favoring a daytrading strategy as risk seems enormous for both parties.
The market has sold off to such an extreme that a bounce seems inevetible, the 2013 playback still ingrained in many traders heads. However the market has changed, a paradigm shift in sentiment.
We sliced right through that 200 day MA. The 200d is a strong suport level that everyone watches, even fundamental guys and I think alot of people were execting that area to hold. The level will be very important in the coming days, you can see that friday immidiatly retested it with an initial rejection. A consolidation around this area for a few days would not surprise me.
We did Sell off an awful lot, it is tough to push shorts here and there are stocks in the market that bulls may construe as bargains and do some buying.
My theory is that we get one last big rally that makes some notable lower highs. Make no mistake though, QE is ending and a bear market is right around the corner.
We may bounce or we may crash. Stay nimble. Daytrading may be the best strategy in a market like this. Take advantage of the intraday volatility and indecision. As a trader the only way we can make money is price movements and we're getting some big ones these days!