Don’t Day Trade This Low Probability Environment – Preserve Capital For 2017

Posted 9:30 AM ET - As expected, the market continues to float higher on extremely light volume. I don't plan on trading today. Up opens are hard enough to trade under normal market conditions. It is harder for us to spot relative strength since all stocks opened strong. The market is at an all-time high and stocks are over-extended. One small sell order (profit-taking) can quickly turn the stock. Bid/ask spreads are a mile wide and Market Makers drop the bid at the first sign of any selling pressure. Trading volumes are extremely light. Stocks that have been crushed this year could see tax loss selling and high fliers could see profit-taking. This adds to the random price movement. Almost every stock that surged higher on the open Tuesday faded the rest of the day. I urge you not to day trade. This is a low probability trading environment and you will be lucky to break even. The market is also vulnerable to profit-taking. If you buy into this early rally today, you could have the rug pulled out from under you just because the market starts to fade. If we get a market pullback and you can spot really strong stocks, then you might consider a tiny trade. Trading conditions will improve next week and 2017 will be an excellent year. Don't piss your trading capital away this week. Keep your powder dry and be ready for action. . .

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