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Matthew Timpane, CMT

Matthew Timpane, CMT

Matthew Timpane is a senior market strategist at Schaeffer’s Investment Research.

With over a decade of experience in investing, he has a knack for finding unique opportunistic risk vs. reward propositions. His areas of expertise include managing multi-strategy portfolios, trend-following, inter-market analysis, and trade execution efficiency.

He has helped tens of thousands of traders navigate the world of options trading through live events such as Benzinga Boot Camps, MoneyShow events, and many popular trading podcasts.

Mr. Timpane earned his B.S. in business from the University of Wisconsin.

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            [post_content] => Happy New Year, dear readers!

Here's wishing you a year full of learning and accomplishments.

So how was 2021? Was it anything at all like 2020? I hardly doubt that a year like 2020 will make its way to us that quickly!  I feel like the year you had would be dependent on your trading style. If you're a trend follower, then opportunities came in instalments. If you're a range-bound trader, then the past year must've been a delight! But regardless of the type of trader you are, the year 2021 definitely imparted a lot of lessons!

As we enter a new market year, we look forward to the teachings of the year 2022 as well. Sure enough, the pandemic is still around, but for how long? Nobody knows. It's like asking a technical analyst how long the trend will last. Nobody has the answer. You just do what you do with the information you have today.

So, what is it that the market is saying today? Well, interest rates are certainly holding up. What that means is that financials are probably doing well in that environment. Rising interest rates translate to rising equities and commodities. Stocks and commodities are probably doing well there too. What else? Precious metals haven't been up to anything really, so at this point who knows what will happen there. We're seeing breakouts coming through in several sectors from regional banks to materials to chemicals. The Indian market has seen complete domination on behalf of the Information Technology Sector that has been the most consistently bullish sector all of last year. And what's more? It doesn't seem like it's in the mood to grind to a halt.

Markets are doing well in pockets, and that may as well be the theme going forward. We're way past that point where the market has to recover from a shock event like the 2020 crash. We may not see front-line indices putting up their best performances but we may see stock-specific moves dominate the year ahead.

So, what is one to do in such a market? As a kid, I used to play a game called Wiggly Worms. There was a big flat red apple with tiny holes in it that housed tiny worms with coloured tails. As you'd start the game, the tiny worms would come out of their homes one by one, at random, and you'd have to pull them out. The person who pulled out the greatest number of (same coloured tail) worms in under a minute won.

The point is, that we might be in a Wiggly Worm market. Different trades (worms) will jump out at you at different points in time. If they suit you, you pull them out. If they don’t, you place them back in. When the market as a whole is going up, it's easy to make money because of the bullish mood. But we may be in a market whereby relative strength will play an even bigger role than it has in the past. My plan is to take each trade as it comes rather than waiting for the combo offer deal.

In this month’s edition, we bring to you comprehensive Options strategies, a book review, and reminiscence of the MTA among others.

We’ll meet again next month. Until then, Think Technical!

Rashmi Bhatnagar, CMT

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