Tuesday Evening

The action today was an example of why this market has become very challenging to trade (in my opinion). A lot of the typical things traders look at were lined up just right for more downside. We reversed from the highs by slightly more than 10 points, the Euro was weak, Gold was weak, there is a "no trade" gap in S&P futures sitting at 1315, ... etc, etc. In addition to all of that stuff, seasonally for May, today had the weakest odds of being a positive day (See Day 20 below).

This brings up an interesting thought that we've all talked about before. The game has definitely changed from 5 years ago (I know... "duh"). But, some days it seems the best trading strategy is to just do the opposite of what the indicators are telling you to do. I know that sounds stupid... but on a serious note, I think it's important to make sure we really understand both sides of the trade.

With the playing field narrowing in the last few years, "left over" market participants are now faster, sharper, more patient, and have every tool available to make trading decisions. That's not even including the explosion in HFT Algo's... which throw in even more challenges to the market environment. This is a tough job and it's only getting tougher...