The Best Thing to Do Today Is Probably Nothing

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Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free Weekly Market Outlook Video here.

After another snoozer of a trading session Tuesday, today we enter the last day of the month and the first of three central bank rate decisions. The FOMC announcement isn’t scheduled to hit the wire until 2 p.m. EST, which means the snooze fest is likely to continue until then.

For those looking for a quick trade after the announcement, beware that the first move often is a fake-out, only to rip in the opposite direction. In other words, patience, more often than not, is rewarded on FOMC announcement days. Sometimes it even takes until the next morning for the tape to find its true direction.

The issue with the timing of this week’s FOMC announcement, however, is that it not only coincides with other central bank interest rate announcements, but also with the July jobs report. So, just as traders digest it, they need to prepare for Friday’s jobs report.

All of this sounds hectic, and to some, potentially exciting. But considering what’s at stake (hard-earned money), where we are in the broader market (a steep nine-month rally), and the time of year (summer choppiness), I would offer that the high road may just be the route to take this week.

The most difficult skill I had to teach myself as a trader was to remain patient. In principle, it’s a simple thing — just wait for a trading setup to arrive, then pounce. The markets being what they are, however, have their way of making all of this tricky.

Not a day goes by when I don’t miss a trading opportunity that I had on a watch list. In the past I used to fume over these “missed” opportunities, but now I know that there will always be another trade.

Additionally, oftentimes our losing trades are the ones we are chasing, well past when the original signal came. This could be just such a week, when jumping the gun, or chasing a missed trading opportunity could cost us much more, both financially and mentally, than we otherwise are willing to risk. Stay patient, my friends.

SPX Chart
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The five-day chart of the S&P 500 looks just as boring as it felt sitting in front of the screens. The immediate-term range is capped by 1,690 on the upper end and supported around the 1,675-1,680 area.

I fully expect the index to break out of this range later this week; the question is whether we break above 1,700 before ultimately settling into a meaningful mean-reversion trade to the downside.

QQQ Chart
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Lastly, note that the Nasdaq 100 ETF, PowerShares QQQ (QQQ), is a tick away from breaking to new year-to-date highs, yet within the context of slumping momentum.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.


Article printed from InvestorPlace Media, https://investorplace.com/2013/07/daily-stock-market-news-the-best-thing-to-do-today-is-probably-nothing/.

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