Market analysts are just now starting to produce fear in the markets. The other day, the Scotland National Bank came out telling everyone to SELL SELL SELL. Today, CNN has an article about fear gripping the markets because it has fallen 500 points. Yet, I was preparing traders for this back in August. First, the monthly flipped the ATR — that takes a lot of power. Then we expected price to go back up to the ATR to form a resistance area. This is typical price behavior. In order to continue down, price must find an area that will act as resistance. Price went up to less than 100 points to the ATR and then started back down. This was predictable and anticipated after the Feds raised the Funds Rate. Why do you think they choose to do it right at Christmas? Because they were hoping for a cool off period before all the professionals came back and, possibly with the cool off period, the markets would not crash as badly.
Fear in the Markets – According to CNN Fear & Greed Index
According to the CNN Fear & Greed Index, there is extreme fear in the markets.
I am paying attention to the 15371 area on the Dow (we already knew where it would be heading). If it breaks this area, then a plunge of 500 points is going to look like chump change.
Knowing how to read the price charts and being able to identify the support and resistance prevents this type of fear from affecting your trading. While some indicators may work as long as the market is only going up, the TradersHelpDesk work in all the different types of market environments because they are based on price. Long-term, short-term, volatile, non-volatile, really doesn’t matter because we teach you to read the charts, read price, identify support, identify resistance, and then incorporate volume on entry (volume doesn’t work on longer term charts because they don’t truly give us the data we need for those charts).
While others may be panicking worrying over the market crashing, I am loving the increased volatility because it provides me with even more opportunities. Instead of one or two trades a day, are getting numerous trades on the best days when the market is truly moving. Fear? I only fear that it won’t last as long as I want it to.