NCAA’s, Oversold and Top 10 Reasons to be a Voyeur

One business matters to take care of today. Make sure that you get your NCAA bracket done before tip-off.

Now that that is out of the way. The question of the day is why sit and watch the market go back and forth day in and day out, in a range and now a channel, drifting lower, if you are not a day trader? A valid question. You could just set two alerts for your top and bottom levels, and start streaming Netflix or better watch the NCAA tournament. But there is value in the information that the market gives you every day. Here are the Top 10 Reasons to keep watching everyday.

10. See the Bottoming or Breakout Process Develop – This is very rarely a one day event. But a major move can happen and kick start the next trend.

9. Identify Future Support and Resistance Levels – Often the choppiness in a wide range consolidation will reveal future support and resistance levels that did not seem obvious previously.

8. Gain a Better Understanding of the Connection Between Markets – Everyone knows that the markets are connected, use this time to see just how and increase your knowledge base.

7. See Patterns and Trends Forming – Whether you believe in patterns playing out in the market or not is irrelevant since a lot of other people do and they trade accordingly. So if the market is creating the Head of an Inverse Head and Shoulders pattern or stuck in a trending channel, that information has value for what others might do upon completion or a break out.

6. Identify Future Market Leaders – Spend time looking to find which stocks hold up best in the downward moves and which get pummeled. Conversely you can also identify those that perform best when the tide is rising and which lag. They winners and losers may not be the same in both scenarios.

5. Create Future Watchlists – Armed with the information from #6 above have these lists ready with entry, stop and target levels for when the market suits you.

4. Stay Connected and in the Flow – You know how it takes a few days when you come back from vacation to get back int the flow. Do you really want to be on the sidelines getting reacquainted when you could be ready to trade?

3. To be Able to Talk to Your Friends – Actually you have no friends, just people you know in the market. How can you continue to talk to them if you are not watching? Just do not use the word Oversold. In fact forget about whether the market is oversold or not. You cannot buy or sell oversold indicators. Price is what matters. For more on this read the link below.

2. What Else Are You Going To Do – You are a market junkie right?

And the number 1 reason to keep watching the markets while not trading:

1. Because Your Boss Will Stop Paying You If You Don’t.

It is St. Patrick’s Day and the start of the NCAA College Basketball Tournament today. Turn on the games and have a green beer but do not tune out the markets. Have a great day.

From the Archives: Is the Market Overbought?

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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