Trade The Trend Traders Attacked By Institutions

Institutional stock traders have targeted trade the trend investors like us. With bitter, evil, fashion, Institutional stock traders are selling into the up swings and covering shorts into the down swings to compact the swing range too narrow for the majority of us to make money in. This has made head fakes both to the upside and to the downside over the last week.

Something that has spooked bears like myself is that an official higher low is now in place with verification on today's chart.

Like I wrote about last week, the life cycle of the preceding downtrend channel has come to an end. We are now in nomad territory while a different channel is forming. We do not have a sufficient amount of information yet to guess if we are going into a sideways trading channel, or an uptrend channel.

When there is no clear trend, then what must trade the trend traders do? Move to the sidelines and the protection of cash.

Now we have been in cash two times over the past couple of weeks and while we thought a new trend had been established making us move back in, it turns out we were head faked and murdered. I do not know about you but I am weary of getting my butt kicked by the better equipped and armed Institutional traders.

Someday we may perhaps have a Traders Bill Of Rights where the battleground is made non-discriminatory, but for the present, inequalities continue to exist between professional and amateur investors such as Institutional traders have access to all limit orders, they have direct access to market makers and can make non-open market trades, they have access to a faster stock data feed and can use high frequency trading schemes against us, and they use the news to control public opinion about a stock or the economy as a whole.

What is additionally key is that on the daily chart of SPY, bulls have re-taken the 50 day moving average but we still need confirmation of the break.

The gaffe I made was leaping back in this stock market twice now and being wrong both times. This suggests that I should raise the bar for what I believe to be a new trend taking shape. This suggests that I need to find more bullish or bearish indicators on the charts than I have in the past. Even a Bearish Head and Shoulders Top and a Burial Cross was not enough to put my money on the short side. Not even a Bullish Downtrend Channel break was sufficient to place my money on the long side. Each and every one of these indicators have meant nothing over the last few weeks. The only thing that these technical indicators have done is to lure us trade the trend traders from off the sidelines and into a trap where we have been killed by the thousands.