We have simply had perpetual cyclical continuation in the Equities markets as we move across the world from Sydney back around to Tokyo each day. The continued height of the “bouncing ball” of noise and chop across all markets seemingly gets higher and higher.

Weekends usually bring us market “reflection” and the ability of a little time to see what we have done, and where we may be going. In this case, perhaps many took a peek over the weekend at their own financial affairs. Some probably made some calls to their Brokers and Advisors…their Astrologist…their Clergy…or anyone else who could ease the pain.

Translation?  A Continuation of Fear and Uncertainty!

The 22:00GMT opening gaps on the Yen Crosses in Sydney on this particular platform prove this point. EUR/JPY gaps open from 119.16 down to 116.12 and GBP/JPY clocks in at 150.55 down to 145.51.

Please click to enlarge the captures.

(These gaps were beautifully filled with symmetrical fractals straight away…a little unusual, as Sunday gaps

have taken some time to fill in lately…)

If you are going to work with this type of price action, I would favor selling into strength through key retracements levels and horizontal, as well as vertical support and resistance areas. Use your Fibonacci tools, Elliott Wave analysis, and other cyclical tools.  You may have to venture back a ways on the weekly and monthly charts here for solid support and resistance levels, but they do exist.

We will more than likely continue to see these gaps as long as this deep volatility continues.

Perhaps Monday may really be a new dynamic in the markets. Perhaps we will simply “freefall”, and finally clean ourselves out. We saw it in 1987 under similar circumstances. Or…perhaps not. I do not know. And I do not want to know. I simply wish to SEE…

This is perhaps, one of the most important “built-in Lessons” of all.

These markets will do what they are going to do…literally regardless of interventions of any sort. The last 15-20 trading days have certainly proven this point.

It is this exact notion that you should take with you into Trading. If the world powers-at-be, the Central Banks, the injection of trillions of dollar worldwide, and your dog magically opening the door by himself has not changed the situation…do you believe you can alter a particular Price aspect of your trades?

As I mentioned last week…..your job is to REACT to the current scenarios and market climates around you.

In many instances, we will hear of veteran professional traders on many levels simply staying out of the market. Their risk tolerance is not a question of conservation or aggression. Theirs is a profile of current market action not being applicable…period.

No matter how tempting the shiny fruit on the tree appears, their risk profile does not acknowledge it.

So check your own risk profile and see if the climate is comfortable for you.

Always remember…remaining flat with no trading activity is also a deeply viable option.

It is, perhaps, the most “logical and educated” position to take for yourself if you have any level of discomfort.