Market Action Is All Noise – A Drop To the 100-Day MA Would Be Great

Posted 9:55 AM ET - Stocks continued their slide on Tuesday and the tone is negative. It will be tough to stop the bleeding during this news vacuum. Traders are focusing on the drop in commodity prices and Asset Managers have pulled bids ahead of the FOMC statement next week. As I mentioned in yesterday's comments, I don't get overly excited by commodity lead rallies and I don't get overly concerned about commodity lead declines. There are advantages and disadvantages to low commodity prices. S&P 500 earnings will be down because of energy stocks. We will lose jobs in this sector and there could be some credit concerns for exploration investors (US banks - relatively contained). On the positive side, inflation will remain low and consumers will benefit from low pump prices. Transportation costs will fall and oil is a major input in many finished goods. From my perspective, this is all noise. We are seeing some position squaring ahead of the FOMC and the daily price action is momentum driven. I would like to see a drop to the 100-day moving average before next week's Fed statement. The market is ready for a rate hike and Janet Yellen will soften the blow with dovish rhetoric. Stocks will like the news and we will get a nice bounce into year-end. I will be day trading from the long side today. This strategy has worked well the last few days. I'm focusing on stocks that have based and are rallying through horizontal resistance. If the volume is heavy and my trading system generates a buy signal, my probability of success is extremely high. Take the free trial and I will show you how I do it. Yesterday the 200-day moving average held. If we can stay above it today, prices should grind higher. If we make a new low after the first few hours of trading, we are likely to close below it. If that happens, we could test the 100-day moving average later this week. I consider this a low probability trading environment and that is why I'm day trading. . .

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