First Posted almost 2 years ago and still relevant
“This is Veg-O-Matic, the world-famous food appliance! . . . the only appliance in the world that slices whole, firm tomatoes in one stroke, with every seed in place. . . . French fries? Make hundreds in one minute! . . . Isn’t that amazing?!”
Let’s face it, the really big money is made in the big trending markets. What happens after a big trend comes to an end? Well, that is when you enter into a period of uncertainty.
Some traders like to characterize this as a trading range. I would refer to it as a Veg-O-Matic market, as it cuts and slices most traders to pieces.
No matter what you call it, trading range or Veg-O-Matic market, it is important to remember that you remain patient and wait for another defined trend to begin.
So how do you tell if a market is in a trading range?
The easiest way is to use MarketClub’s Trade Triangle technology. When you see a Chart Analysis Score of around 55-65 on the chart, it indicates that there is no discernible trend present. Trading range markets, or Veg-O-Matic markets, are best left to the professionals.
If you do feel the urge to trade in a market like I described above, you are better off using some sort of oscillator like the Williams %R indicator or a fast stochastic indicator. These indicators allow nimble traders to catch the swings, up and down. For the average trader, this is a time to be on the sidelines and looking at other opportunities in other markets.
Make no mistake about it, trading range markets are generally difficult to trade and generally do not give up profits easily.
So remember, if it’s a big Veg-O-Matic market, you’re better off waiting on the sidelines until you see a clear trend develop.
All the best,
Adam Hewison
President, INO.com
Co-creator of MarketClub.com
P.S. Samuel J. Popeil invented the Veg-O-Matic. He also created the frenzied ads that made his product a late-night television sensation in the late 1960s and 1970s.
shorting is what is screwing up the markets
think about it
France Germany and a few others have now banned shorting the banks
Australia stopped shorting during the GFC and it saved our bacon
shorting is as bad as derivatives
the markets are going south - probably during the week France will be downgraded as well
this should get things moving
down
ditto on what adelino wrote!!!
Thanks Adam for your input, I miss your 1pm updates :-(. But I hope your having a great week off :-). O and thank you for sharing the inverse ETF's. There what we need in this down trending market.
I’m thinking the sideways action we are seeing in the DJI is coming from the resistance levels we had in JAN, MAY & AUG 2010. The market is trying to figure out if we’re staying above (as support) or falling below the 10,700.00 level; I’m thinking it will fall below and continue down soon.
Thanks for all you guys do at Market Club.
shorting is a much harder and different game than going long. When the market goes to downtrend, it goes fast and furious and the reflex rally is equally violent.
The long only strategy has its merit. If people think they can make money all time, they are mistaken, or they don't understand the stock market.
Patiently stay on the sidelines and wait until market condition improves are a smart play here.
I agree 100% with Christine. The problem with not holding a short position is that you'll miss a big move when it finally turns down. ANd I don't think that we have so long to wait as Adam is suggesting, either. As I recall, Adam also warned us of 'support' coming at 1150. If we'd been looking for that and gotten out, we'd have missed an important part of the first big move down.
Of course, Adam is a conservative investor and is all about safe trades. He's looking to steer people into the big move to come and I can understand that. It's a patient, determined approach. STill, as Christine says, the trade triangle ARE, after all, pointing down. And they're Adam's own triangles!
But is this really a Veg-O-Matic market? All the major market indices are still at -90, which would indicate a downtrend, even though they have popped up a bit this morning. Yes, absolutely the markets have been whipsawing folks, but if we're following MarketClub's trade triangles and have been short the markets, then look like we should be holding tight to the positions and not closing them out to be on the sidelines.