{"id":19383,"date":"2022-02-03T07:30:16","date_gmt":"2022-02-03T12:30:16","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=19383"},"modified":"2022-02-03T07:30:16","modified_gmt":"2022-02-03T12:30:16","slug":"consider-taking-the-year-off-from-trading","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/consider-taking-the-year-off-from-trading\/","title":{"rendered":"Consider Taking the Year Off from Trading"},"content":{"rendered":"

The easy money has already been made for the current bounce in the stock market.<\/p>\n

Any further gains from here are going to be a hard fight…<\/p>\n

The Volatility Index (VIX)<\/a> generated its first buy signal of the year last Thursday… and stocks have rocketed straight up since then.<\/p>\n

The S&P 500 traded yesterday about 300 points higher than where it opened on Friday. That’s a 300-point gain (roughly 7%) in just four trading days.<\/p>\n

Heck, given the action so far this year, many traders would probably be happy to lock in that profit, close their books, and take the rest of the year off…<\/p>\n

While there’s still a bit more upside remaining for this bounce, it looks like we’re now setting up for a few weeks of choppy, back-and-forth action.<\/p>\n

Just take a look at the updated S&P 500 chart…<\/p>\n

\"Chart\"<\/div>\n

This chart shows a straight-up ‘V’ shaped move off of Friday’s low.<\/p>\n

The index has overcome the resistance<\/a> of both the nine- and 20-day exponential moving averages<\/a> (EMA – red and green lines). It’s now approaching its blue 50-day moving average<\/a> (MA) line near 4626. The index will likely struggle as it approaches that level.<\/p>\n

Despite the strong bounce, none of the technical indicators at the bottom of the chart (MACD<\/a>, RSI<\/a>, and CCI<\/a>) are anywhere near “overbought” territory.<\/p>\n\n\n\n
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Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The RSI and CCI momentum indicators are neutral. And the MACD is still deep in oversold territory.<\/p>\n

So, it seems unlikely the market will turn around and immediately retest the lows.<\/p>\n

Rather, we’re probably headed into a consolidation period – where the S&P 500 ping-pongs back and forth between its various moving averages.<\/p>\n

Traders should note that all of the various moving averages are spread quite far apart from each other (blue circle).<\/p>\n

We usually don’t see big moves in the market when the MAs are in this condition. Instead, the market chops around in a tighter trading range and gives the MAs time to come back together and build energy to fuel the next big move.<\/p>\n

We had a chance to buy into oversold conditions last week<\/a>, when technical conditions were stretched to the downside and investor sentiment (a contrary indicator) was leaning quite bearish<\/a>.<\/p>\n

Traders who had the courage to do that are sitting on nice profits today.<\/p>\n

But buying stocks today – after the market has already bounced well off the lows – is a bit more challenging.<\/p>\n

The market needs time to consolidate the recent bounce before it makes another big move.<\/p>\n

Best regards and good trading,<\/p>\n

\"signature\"<\/p>\n

Jeff Clark<\/p>\n

<\/p>\n

Reader Mailbag<\/h2>\n

Did you buy into oversold conditions last week? If not, how long do you think it\u2019ll take for another big move?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

There\u2019s some struggle ahead…<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-19383","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19383","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=19383"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19383\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=19383"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=19383"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=19383"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=19383"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=19383"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=19383"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=19383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}