There's Only One Way to Effectively Trade This Crazy Stock Market

 | Feb 21, 2018 | 11:34 AM EST
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

qnst

,

ccxi

,

lob

Many traders were looking forward to increased volatility after the indices blew up on the unwinding of the short-volatility trade but the action is looking a lot like it did in January when things trended straight up with barely a pause. There just are not any signs of sustained selling pressure. There was a brief skirmish of selling Tuesday but it has been forgotten today.

So how do we deal with this action?

There are quite a few pundits that are happy to tell us that there is no justification for continued upside and the rising interest rates and other structural issues will hit this market hard again at some point. I believe that is likely, but it is impossible to time.

The only way to deal effectively with this market is to understand that it isn't going to correct until the machines say it can correct. You have to respect, honor and obey the price action that is in front of your face and that action is positive. Only when the action shifts can you be negative. Forget resistance levels, oversold readings and everything else. Watch for price weakness and when it starts to pick up then begin to reactive.

I was at the doctor this morning and am running a bit behind but I did start a new position in QuinStreet (QNST) and like the action in thinster ChemoCentryx (CCXI) . Another stock of interest that trades rather thin is Live Oak Bancshares (LOB) . The company has a subsidiary called Canapi that is investing in and developing "fintech."

Let the price action of individual stocks be your guide. It is looking pretty good despite plenty of arguments for why it shouldn't.

Columnist Conversations

Looking like a tough open, but not as brutal as you would expect after Tuesday.
If the slide in the chip space doesn't halt off Texas Instruments' (TXN) good guidance tomorrow, raise cash a...
Today is another day that proves that shorting puts naked is beyond ignorant and the worst way I know to lear...
The SPX has the 200 DMA @ 2607 The 4/2 low @ 2553.80 The 2/9 low @ 2532.69 below   I do WANT TO BE A ...

BEST IDEAS

REAL MONEY'S BEST IDEAS

News Breaks

Powered by
Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.