Market Report Consolidation, Complacency, Collapse

Todd Horwitz Chief Strategist BubbaTrading.com

Be Prepared not Surprised.

The worst pattern for traders and markets is consolidation, in other words indecision. When markets are in the phase of consolidation, what we are really seeing is complacency. This is simply a battle between the bulls and the bears.

Eventually the consolidation period will end, we don’t know when. We only know that there will be a breakout up or down. At this point we don’t know which way, but our belief is that the next big move will be lower.

We will not predict the next move, but the facts are clear, inflation, jobs, and the rest of economic data is negative. Interest rates are rising, we see new layoffs every day. Although we are earning more money, the pace is not keeping up with inflation.

For the second time in a year call buyer were not the top spot, selling Iron Condors took the top spot this week. Call Buying came next followed by Put Buyers, Call Sellers, and Bear Call Spreads. Add to this the VIX continues to fall.

The bulls were buying TXN, XLE, IBM, AMZN, and QQQ. The bears were selling SPY, NVDA, TLT, WISH, and ATVI. Markets lack volume and participation

As traders and investors, we have one thing to remember, follow the trend of the market. Be patient disciplined and leave your emotions out. The most important thing to remember is money management and self-control.

Todd “Bubba” Horwitz

BubbaTrading.com