Choppy Stock Market Difficult on Day Traders

As the overall stock market has been tracing out a topping pattern, or at least a sideways congestion pattern, since mid-March, it has been more difficult to identify solid day trading and swing trading opportunities. The most reliable patterns that predict direction have posted less than stellar records over the last three weeks in particular. This has been due to lack of follow through, and high momentum stocks topping out an rolling over. With this in mind it is critical for day traders to expand their horizons and pay very close attention to the tape. Strong market opens have had a tendency to fizzle out lately, making our job more difficult. Therefore it is critical for traders to be more patient and wait for strong evidence of either a strong market follow through after the opening, or a stock that is diverging strongly from the market. As we have entered earnings season in the last week, most of the big movers have been on earnings reports. Unfortunately, in many cases, after the report, there is a large gap up and then limited follow through. This has resulted in significant frustration for many traders. However, veteran traders understand that these periods will occur, but around the corner the market will find its equilibrium and present more easily identifiable opportunities. With that in mind, now is a good time to exercise caution if you have been undergoing a losing streak. Trade smaller, and wait for the stock market pickings to become easy again. www.bestdaytradingstocks.com