You’d better buckle up as we head into the end of the year. This market is going to get really crazy. Since trading is mostly about the best educated guess you can make about a stock price, when the assumptions change you have to scramble. That is what Wall Street is going to have to do after this election.

This morning we can expect things move around as big portfolios adjust to expected policy changes and political drama. But the market is efficient. Not always graceful, but efficient. It will settle into trends pretty quickly. Most likely, right back to the trends we had been watching.

Last week we started with a trade that exploited the drop in tech and it swung wildly and then moved back to the longer trend. Initially, the trade broke a lot of rules but ended up working out. The challenge was to figure out why.

Here is the answer.

It may seem like now is not the time to dive into trading but that couldn’t be more wrong. Trading is a way to add some income to your account that blows most side hustles out of the water. Here is how a pro would start with a small account today.

This is a weekly chart of QQQ and it show that the downtrend in tech is still holding. With a slightly positive day yesterday and premarket looking to try and be positive again it can be easy to lose site of the bigger picture.

The lesson from last week was to always remember to look at the context in which a set up is happening. The probability favor a move in the direction of the broader trend. A reversal requires a lot of force.

We should expect the same thing this week. We’ll watch the reaction to the election today and see how to best adjust, if we need to.

Keep learning and trade wisely,

John Boyer

P.S.–If you are looking for a trade opportunity that seems to ignore the election noise, check out this clip from Keith Harwood.