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When the Tape Whips 4 Ways Before Lunch, Sometimes the Best Trade Is No Trade
Friday morning was a mess. If you were watching the S&P 500 (SPY) and Nasdaq 100 (QQQ), you saw what I saw — and if you tried to trade it, I hope you came out OK.
I didn’t touch it. Let me walk you through why.
The 4 Reversals Before I Finished My Coffee
The morning started with the 8:30 data dump — GDP and PCE numbers — and the market rallied off that news. Fair enough. Then we hit the opening bell and everything took off higher.
Then it all came down and started making lows. Then it turned right back around and moved up again before making lows again.
I’m sitting there thinking: Buy it, sell it, no wait — buy it, no, sell it…
And finally I just said screw this and left it alone.
They ended up going down, so maybe I missed an opportunity. But I also didn’t get chopped up trying to catch a reversal that kept reversing.
We’re Stuck Between Gears
Here’s the thing: I think the bias right now — bias, not trend — is to sell. That’s an important distinction. A bias can lean one way even when the bigger structure of the market isn’t confirming it, and right now the market feels heavy, like sellers have the upper hand but not enough follow-through to call it a true trend.
But here’s where it gets tricky: The Dollar Index (DXY) keeps pushing higher. When the dollar strengthens, it squeezes a lot of things — especially commodities. That’s part of why you’ve seen pressure on gold, silver and copper. A rising dollar can act like gravity on those markets, even when the charts elsewhere look like they should bounce.
This is why it’s so dangerous to oversimplify. You can’t just say the bias is down so everything should drop. Intermarket relationships matter. When currencies, commodities and indexes start pulling in different directions, even a clean setup can turn into noise.
We’re not in a bear market so you can’t just short everything. If we were, sure — buy puts on everything, sell call spreads, have at it. But we’re also not in a bull market where you can buy calls on everything or sell put spreads with confidence.
The day you think it’s going down, it goes up. The day you think it’s going up, it goes down. That’s where we are.
And honestly, there’s another reason I didn’t trade much Friday. It’s Friday and we’re heading into a weekend. They have a tendency to do stuff on weekends — geopolitical events, policy announcements, things that make you nervous if you’re holding overnight risk.
Saturday seems to be the blow-up-something-else day lately. It all depends on what happens over the weekend.
So I kept my powder dry, stayed small and stayed patient. Sometimes the best trade is the one you don’t make.
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Geof Smith
Geof Smith TradingÂ
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Disclaimer: We develop strategies to the best of our ability, but we cannot guarantee a future return. There is always a risk of loss when trading. Past performance is not indicative of future results. Since 12/05/2024, the trading approach discussed today has published 54 trade alerts. All 54 have returned as winning trades, for a 100% win rate. The average return per trade, winners and losers combined, has been 16.88% on an average holding period of 9 days.
