The Market Won’t Change for You

Unusual markets call for unusual thinking. What do I mean by that? Over the course of the last few weeks, the market has been more volatile than at any time in my experience. With emotional trading at a peak, the moves in the indices have been incredible.

Because of the volatility, trading tools that I normally use are not as reliable… the timeframes I normally look at are not as reliable… correlations between investments are out of whack.

Let me explain.

Under normal circumstances, I look at daily charts for trade opportunities. Because of the extreme volatility of late, I am applying the same indicators I always use, only now I am using them on hourly charts.

For example, for the longest time I observed how the futures markets led the ETFs (exchange-traded funds). When the S&P futures and Nasdaq futures would get overbought or oversold, the Spyders and the QQQQ would then move in the opposite direction. However, over the last few weeks the futures have been so volatile it was hard to know when to pull the trigger on a trade. And it now appears that the relationship has reversed a little, and the ETFs are leading the futures.

It can be frustrating. But the market is not going to change for you, so you had better change to cope with the market you are in. You don’t have to change your ideologies, you just can’t be rigid in your approach to making trades and making money.

Inspired by his high school economics teacher, Rick Pendergraft fell in love with the markets at an early age. He entered his first investing competition at 17, and opened his first brokerage account before he finished college. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide. After a ten year career in banking, Rick decided to pursue trading full-time. To get his foot in the door, he started out in the sales department at Schaeffer's Investment Research. It was not long before his talent was recognized and he was invited to apprentice under Bernie Schaeffer, one of the top options traders in the world. Rick thrived in his new position and twice received the award for "Top Trader."Rick has developed a loyal following of readers who are grateful for his timely warnings and profitable advice. He is widely recognized as a market expert and has been frequently quoted by Reuters, BusinessWeek, Forbes, USA Today, the New York Times, and the Washington Post. Rick's primary focus is on identifying short and intermediate term rising and falling trends in the major market sectors. His analysis is based on technical factors along with indicators of market sentimentRick lives near Delray Beach, FL with his wife and three children.