The market looks to be trading in a range since the large drop in early October. I’m guessing that it will continue to do this until some catalyst exists to snap it out on one side or the other. This isn’t an easy market to trade because it seems that the slightest news can cause huge market swings. I will be very gingerly looking to enter some kind of long position this week but the large moves in the market make it difficult to scan for stocks that seem to be making playable moves.

Note on the SPX how this band has been holding. (and we are near the bottom of the band) Futures are down at the moment and if Monday is a very red day that pushes us below this band, then I’m less comfortable with trying to play this market to the upside. Recently, down swings have been larger than upswings so this scares me a bit.

Since IWM has been leading the way down in the recent market pullback, I’m throwing in a chart of it. It is also in a band similar to the SPX and would seem to indicate a turnaround.

My plan: With futures down, I’m not ready to buy into a long trade right now. I’m also not ready to go short at these levels either since we seem to be at a pivot point. I’m going to be patient and watch the market today to see where things close. A doji candle (closing price near the open price) for the day will probably signal a turnaround and I’ll be interested. If we close above friday’s close, this would also be a good sign.

I’m planning to find a stock or ETF that did well last time that we turned around. If necessary, we can always look to a leveraged SPX ETF.