3 WORDS ABOUT THE MARKET: VOLATILITY, VOLATILITY, AND VOLATILITY

Choppy, choppy, and choppy sessions day after day. Sizeable drop and rebouncing, sizeable drop and rebouncing again that is the template. Just take a look at the chart of SP500 below. On Monday made great yo-yo in range of 1.814 and 1.832, first went up the market, then fall and came up again. Yesterday the same scenario in wider range 1.814 and 1.842, first up, then down and up again.

Changed the trend within those days three times intraday. That huge volatility means always the traders are freaked out and don’t know the direction of the market. During these days the market created traps over traps. Honestly this is one the hardest pattern to trade. I have only one recommendation – reduce the position size. I know it sounds trivial, but 90% of traders don’t get it and increase the size of the steak and want to get back as soon as possible the loss. Don’t do that, it ain’t work.

In our view we are expecting great bull rally in the following weeks, because the last weeks choppy market was enough to discourage the traders from the market. Our first target now at the key resistance level at 1,873.

Yesterday the Nasdaq was only 12 points intraday from 10% drop from the top. What would we should do at that level. BUY THE DIP!

The BFM Assets Team.