The biggest challenge that traders face in this market lately has been the lack of momentum. The character of the action is shifting daily, which makes it very difficult to position trades or to ride a trend. A few things will follow through, but they are the exception. The stocks that led yesterday are seldom leading today.
The best way to deal with this is to shorten timeframes. Intraday trading isn't for everyone, but that is the timeframe that does produce the best opportunities right.
If you are trading indices, simply fading the open has been a workable strategy lately. Buy weakness and sell strength is what is working, as traders recognize that chasing doesn't work when there is so little momentum.
I gravitate toward stock picking. To make that work in this market, not only do you need short timeframes, but you have to be very selective. The stuff that does work isn't working for long, so make sure you are ready to lock in gains when you have them.
A few names I am trading are Broadwind Energy (BWEN) , Calithera Biosciences (CALA) and Cancer Genetics (CGIX) . These are small, quick trades because the market isn't offering much more than that. In a better market, with some momentum, I'd give them some room, but in this environment I'll take my gains when I have them and look for something else.
My main focus is to make sure I keep capital close to all-time highs. If I can benefit from some small trades while doing that I'll be better off, but this is a very tough market and if you don't appreciate that fact you are going to be very frustrated.