Six months ago the market was having 400 point swings in thirty minutes. The headlines were full of fear, this time the world was coming to an end, sell everything, and then suddenly stopped.
Since September 30th, 2011the markets have soared, some indexes up more than 35% and the market as a whole up more than 23%.
Where did the volatility go?
There are many wise sayings on Wall Street. The trend is your friend; never add to losing trades, you can’t lose money taking a winner. All of them are sound guidance and many traders rue the day that they didn’t follow that advice.
There is also a dictum those veteran traders are pointing to right now.
Never sell a dull market.
This is a perfect market for investors. It goes up every day on lower and lower volume. All you have to do is buy, hold the position and within a few days the trade is a winner.
Monday was the lowest volume day of the 2012. Tuesday was even worse, and Wednesday proved to be even quieter. The interesting thing is that at least one of the major indexes managed a higher close on every one of those days.
Since the blowoff bottom in the last week of September 2011, the index that measures fear, the VIX, has declined each week. In fact it is down more than 50% from its peak on September 28th.
Actually most Bull markets react like this, they quietly go about their business day after day, week after week, slow and sure.
So what is the secret to trading a dull market?
The same as always, react to what the market is telling you, don’t try and predict the next move. Dull markets take patience and discipline, the same as all markets.
Let the market give us the answers.
That is what I teach my students, how to have the discipline to take any market problem and turn it into an opportunity.
My method will work in any market condition.
That is what I teach and I can teach you too.
To learn firsthand how I would trade the opportunity that low volatility markets present, speak to one of my representatives and sign up to work one-on-one with me here:
http://averagejoeoptions.com/qual/
As Always,
Keep those stops tight.
Todd “Bubba” Horwitz
P.S. We run the fastest growing online options community. With weekly webinars and a very energetic forum, my team and I are always looking for great risk/reward opportunities. Click on the link below and become a member of my community today.
http://averagejoeoptions.com/qual/
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