What to Do When the Market Opens Big in One Direction
10/15/2012 6:00 am EST
The staff at AllAboutTrends.net offer share common-sense ideas for keeping your head in the heat of trading.
As a rule of thumb, anytime a market opens big in either direction, NEVER take a trade in the opening direction of the market when you have a big opening move. The big move already occurred. Just think if you would have shorted MNST and AAPL and a lot of others out there at the open in the examples below—OUCH. The flip side is don’t react and sell either right away. On this day, just about everything has bounced since the open. Let the opening dust settle first and above all NEVER REACT.
Just look at the chart notes in MNST, AAPL and SBUX just to name a few. Given the “Don’t Blink” nature of the markets we do this so you know in advance and are prepared for when and if an opportunity presents itself.
Instead of reacting to a big move AFTER the big move has taken place, pay attention to support levels and don’t be afraid to “buy in the face of fear” leading stocks that have successfully tested support levels.
By the Staff at AllAboutTrends.net.