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at resistance

all the major indices have made a nice move to the upside over the last 6 weeks. We are now at resistance in all three. The financials made a nice push yesterday and joined the move up for the first time. The only question now is, does the market have enough juice left in it’s tank to push through with some volume. My guess is no. Corporate earnings have been OK, but not significant enough to sustain new historical highs.

Now here is what separates professional traders from everyone else. I am taking my long positions off the table at resistance. I don’t hink we will make a new leg higher, I am prepared to short. However, if the market does make a new nigh with good volume I will cover my shorts and get long. Sounds simple and obvious right? Well we can tell you most traders will have an opinion and stay with a position even if its wrong, just because they want to be proven right. I don’t need to be proven right, I want to make money.

As we teach in our educational classes, make a trade based on what is probably going to happen, reevaluate based on what IS happening, no ego.

Categories: Market Set Up
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