Wednesday, June 4, 2014

The Problem with Non-Trending Markets....6.4.14

Today's action was the inverse of yesterday, with marginal gains and a fundamentally neutral outlook.
That being said, the markets have gone from a clear trending paradigm to a consolidation mode.

Is it difficult to make money in such markets?  Well, yes..  You could use options strategies such as covered calls or collars to protect existing positions, collect premium and mitigate potential loss. But with trending momentum fading the safety of cash is always a viable alternative to preserve capital while waiting for the next trend momentum to develop.