Market volatility in October.
Volatility that we’ve seen over the month of October is caused by uncertainty, panic, and earnings season. As many of you know is that market always wants to go up, so if it falls it goes up, again. Bullish trend follows every bearish trend, it’s a cycle.
October fall is usually followed by rally in November and December when everyone makes money. However, bear trends started in October as well, so be very careful when selecting your strategies and buying/selling stocks.
My rules for trading, I am more of a position trader, rules for day traders will differ.
- Small position
- Control risk by using stop-loss
- Follow the trend (this one should actually be the first rule)
- Place trades below the support line (bullish) or above the resistance (bearish)
- Plan your trade, and trade your plan
- Make decisions on the market close, not the market open
- Don’t panic
After today’s fall I still think that we will see a continuation of a bull trend for at least a few more months. It’s a high probability that people will start spending money on presents, and travel in November and December. Airlines and retail will see a profit; real estate will probably go down because no one wants to buy a house at that time.
Here are the stocks I believe will go up within few months: UNH, SQ, PYPL, PCAR, ADBE, ABT
And stocks I am looking at, will wait to trade them after their earnings: MA, MCD, MSFT, NKE, V, CRM, CSCO
On the ETF market I don’t like what the RUT is doing, it wants to find bottom, but apparently bears have control over it. Momentum is slowing, with the next support level at 1500.
SPY, DIA, QQQ might be bullish in few days, so we’ll see.
For me, I am holding off my trades for now until I see where we are going.