The Enemy of My Enemy is No Trend

Although we make a concerted effort inside Market Chess Subscription Services to be apolitical in our approach to markets, it is hard to ignore the dynamics of the trade war in play. Clearly, there is at least some sensitivity in this rangebound, late-summer tape to President Trump's strident tweets regarding China and The Fed.

Mind you, I am not choosing sides when it comes to those given tweets--It simply is what it is, and the market is likely functioning as a very short-term emotional beast rather than rationally weighing long-term consequences.

But the reality is that even the very best individual charts and growth stocks are at least somewhat impacted by the geopolitical uncertainty, at least for now. That can change rather quickly for the better. However, we need to see the indices adequately morph into a smooth, trending phase again before that happens, in all likelihood. In other words, as long as the range persists, or worse, most of the very best growth stocks and charts are essentially fighting an uphill battle to sustain breakouts, even if they take time to form new bases in the interim.

The net result of that equation implies that most traders should continue to exercise patience and retreat as needed--Think of this market as a fencing match, where we take our shots at attacking only to quickly retreat, and so forth. Again, a true breakout will quickly shift the dynamics in favor of bulls, and stocks like TEAM, for example, will then probably surge in jaw-dropping fashion.

Until then, we can take solace in the precious metals and miners outperforming. PVG is a miner which is basically acting like a hedge for me today versus a few of my healthcare and tech longs getting whacked. 

As for short setups, I will delve into some fresh ideas over the weekend with Members in a strategy which likely carries less risk in this spot than you think, for a variety of reasons. 

For now, with the VIX popping back over 20 and the indices back down to the low end of their ranges, my focus is on taking at least a few of the toes I had in the water out for the weekend while markets digest some whirlwind Friday headlines.