There have been a few quiet weeks as the market has been range bound, not able or willing to make up its mind so we continue to see the market rally, only to drop again. We also see the market dropping then see it rally again therefore this type of market is a market that traders should refrain from trading in. A good trader knows that there are times where he has to sit and wait, just like a cheetah stalking and watching a herd of animals before deciding that it is time to attack. This quiet market does not mean we do not analyse the market or keep up to date on macroeconomic events as we still read blogs, news, newsletters and so forth to get a feel of the sentiment among traders and investors so we can determine if the market is about to change dramatically and what we are seeing currently is that traders and investors are anxious to put some money into play. It is often around these times that the inexperienced traders lose money as they force trades on. This is because the market obviously cannot feel whether traders are anxious to trade so therefore can't just deliver when traders want it to. The market does not care what traders want. This is where the inexperienced traders simply do not have the patience to wait for the market to hand over the trades so they force the trades on. Do not make it difficult for yourself; wait for the market to make its mind up! By using the cheetah analogy again we can see how this compares; the cheetah has two choices, attack the herd hoping to catch a prey or the cheetah can wait till it spots the weak animal in the herd and thereby increasing the odds for a successful hunt. Let us wait until the market shows us the "weak animal" so we can increase the odds for a profitable trade. Sites like Stock-Market-Strategy.com are seeing their members asking for trades and sadly enough many of these sites give in to the pressure and make some calls only to see their call turn into a loss. This only frustrates the members even more. Here at Stock-Market-Strategy we do not call trades simply because our members ask for it. We are not in this business to make our members happy by calling many trades. In fact it is quite the opposite as we are here to call trades that make our members money! We only call trades that we personally take in our trading account. If you look at the chart you can see that we are still range bound (1) telling us that neither the bulls or the bears have won. It also tells us that there is no trend and thereby telling us we cannot trade. Here at Stock-Market-Strategy we always go with the trend and it is this rule that keeps us out of this chop as there is no trend. The chart also shows us bullish divergence. The first is when the market made lower lows (2) but there were fewer stocks making new 250 days low on NYSE. This tells us that the market is dropping while the stocks are holding up. The other divergence (3) is when the market almost hit previous high early August and sold off. Here we see that advance decline is showing us that there are more advancing stocks cumulative at this high than prior high. This means that the stocks itself are stronger than the market. We are also seeing more stocks making new 250 days high that at prior high. This indicates that the stocks are stronger than the market. [caption id="attachment_673" align="aligncenter" width="470"] Click image for full size[/caption] What does this mean then? Well it tells us that the market breadth indicators are bullish which of course makes us believe that the market will go up but this does not mean we can go long because we still need price action to confirm the uptrend. We need things to be in alignment. Price cannot break previous high which is bearish but market breath indicators are bullish. These are mixed signals and here at Stock Market Strategy we have a saying "when in doubt - stay out"!