When You Can’t Explain What’s Going On…Stay On The Sidelines Until Clarity Emerges!
The overnight volatility in the markets that led to a halt in the futures still remains inexplicable in the absence of any clear news that drove it! As our models forecast on Monday, 12/03, when the financial media headlines was touting hundreds of points gain on the open in the markets on the back of the “noise” of the US-China trade war “truce” with no real details backing it, there was something not right about that up move – looking back, now it looks like a bull trap, after all!
As mentioned in our last forecast, our models are sporting an indeterminate bias and indicate staying out of the market today as well – for a third consecutive trading session since Monday, 12/03. They are monitoring the market action and will look at the daily close before trying to form any directional bias. As of now, they are screaming “we can’t understand what’s going on and can’t predict what might happen”, which is perfectly fine to acknowledge and stay on the sidelines until clarity emerges.
We repeat…LET THE NOISE SETTLE! No need to rush in front of every potential trading opportunity. Some major news is cooking and we need to let it out in the open for markets to settle into a directional move again.