Why should we be standing aside?
As the S&P 500 made a new high, it would be obvious to now look to get into the market.
The fact is, this current environment is being driven by the dumb money. This was mentioned on the last couple of weekly webinars and we can see the inflow of the dumb money by simply looking at the range of the bars on S&P 500. The small range indicates a lack of big dog investment.
We can also see that the dumb money make up a lot of the participation now by the low volume levels as price moves up.
Standing aside is a good way to preserve our capital until we have reason to assume price will move up.
So what are some of these reasons?
- A simple glance at volume will provide us an idea of participation.
- The range of the bars expand.
- Price stops struggling around this ATH.
There are many more factors we look at in Level 3 but this will be a good starting point for everyone to evaluate the current market.
Like I said in recent times, while the market makes up its mind, enjoy the time off from the markets.
Let’s go trade!