If you needed yet another sign that the volatility is low, just look at today’s action after the Federal Reserve rate announcement. Yes, we knew that the rate was going to be steady. And yes we figured that the language in the announcement would be similar to previous ones (Fed plans to keep rates exceptionally low for extended period etc.)
But even on previous decisions in the past few months (or non-decisions more appropriately) we saw at least a little shakeup in the market. Maybe a short squeeze, or a few big sellers or buyers come in. Today, however, we barely made a new low, and just kind of sat there. No selloff, no short squeeze, nothing. Time to take a vacation? Not quite yet. Maybe next week.
The way I see it, even in this light volatility market, there still are opportunities in the most in-play stocks. You have to go where the volume is; you have to go to where the volatility is. Even if there is no market-wide or sector wide volatility, there’s always going to be an earnings announcement, a company giving some bad guidance, or some rumors out of Washington that some industry or company might take a hit or get a boost.
Just a few examples of those today were: Express Scripts (ESRX), Medco Health Solutions (MHS), XTO, and Exxon Mobil. There’s always going to be something on the move. If you are a skilled trader, you just might be able to capitalize on it. Keep your eyes and ears open, do your research, rip through news, and be ready to trade. That’s all we can do, and we’ll keep on doing it.
Best of luck with your trading, and don’t forget to follow us on Twitter.