A1 Trading

Markets Are Tumbling... Do This Now

December 20, 2021
Frank Cabibi

12/20/2021

As the omicron wave pushes its way through the US and Europe, global equities markets remained mostly mixed or are in the red. Employees are not returning to their office jobs as companies are closing early, basketball and hockey games are getting canceled, and shows postpone or or are discontinued for the year.

Our outlook

Things look gloomy going into the end of the year while further downside is expected by most investors. However, there is a lot of potential for the stock market going forward regardless of the expected interest rate hikes in 2022. I think investors can find some comfort in the possibility that the Fed will step in some way to counteract the potentially-harmful action on the stock market. There are some things that you should be doing now to protect your account in this volatile time.

One, keep mostly cash while you look for setups. Buying on the way down isn't a bad thing, but make sure you are keeping enough to pad yourself enough for the possibility of a continuation to the downside or an extended period of lows.

Secondly, take smaller lots to ensure minimal loss on losing trades, even though it means you will not be making as much. The holidays can be a very interesting time with pockets of little volatility before a sudden spike in activity, at least in the US stock market.

Trade Setups

SPX500

SPX500 fell once again today by over 2%, but seems to have bottomed out in the $4530s. Some rejection from the lows could suggest a move higher as a potential new trend line formed. Price crossed under the 50 DMA which could be a bearish indicator for the index as well. Additional support lies at a lower trend line around the $4490s.

NAS100

NAS100 fell under its 50 DMA and trend line as well and might have formed a double bottom around $15,520. If today's candle can close around the $15,670s near previous days' closes, we could see somewhat of a hammer formation and a potential bounce from the double bottom.

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DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
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