HITTING A WALL

The market seems to be hitting a wall. It tried to gap up above the resistance at the market open, only to immediately drop back into the range. The VIX gapped down and immediately rallied back up. The sideways trend is actually normal for this time of year. It's hard to find a catalyst for the market to break this resistance. However...the contrarian in me thinks that if so many people are predicting a pullback right here, we will probably breakout above this resistance. I heard an interesting comment the other day which really sums up contrarian thinking. The commentator said that the market will always try to hurt as many people as possible...or something like that. I know that sounds very sadistic, but it is often true (It sounds like the background for a new Stephen King novel). The point being that if too many people are lined up on one side, the market will often buck the majority perception and move in the opposite direction. We'll see what happens tomorrow. I was going to inquire as to why I haven't received any new success stories...but I realize that many of you have probably been sitting on the sidelines during this choppy move (according to my earlier admonition)...or you've been trying to trade this market and you're getting your butt kicked! I told you these sideways conditions can be brutal to a trading account. There are ways to hedge yourself. Try using credit or debit vertical spreads, calendar spreads, or even covered calls. This may decrease the percentage return, but it will give you a higher probability of getting a return! For those interested in these strategies, contact your enrollment advisor about our Advanced Options Strategies eight week course. It will increase your knowledge of how to best trade stagnant or sideways trends. I've been doing several debit spreads ahead of next week's June expiration...many on patterns listed on the blog. If you do have new success stories, please e-mail them to me so that I can get them posted on the blog. Some of you need a few more minutes in the spotlight!