Karpel’s Corner: Higher High, Lower Low. Is trend change upon us?

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

We have been seeing the trader’s appetite shift when it comes to taking on risk. Over the last couple of weeks, the small caps ($IWM) have fallen out of favor.

It is clear that traders are cycling out of the higher beta stocks. But they are not rotating into the higher-yield, more secure stocks as the Dow ($INDU) established lower lows.

Now, this is expiration week, but we saw action that I have not seen in over 2 months. Specifically, we had the $SPY down 1.14 percent, and I have not seen a 1 percent move in a day in … well, too long.

With volatility ($VIX) soaring and major trends challenged, being nimble is the course of action.

See you next time at the Corner!