RECOGNIZING FALSE BREAKOUTS AND WHIPSAWS

The market is generating its fair share of colorful phraseology these days. Many traders are calling it nerve-racking or unreliable, while Cody's classic use of the term "dislocations" should find a permanent home in the Terminology Hall of Fame. But is this market really any different from the past?

Of course it's not. The market is bobbing and weaving the same way all stocks, sectors and indices do the majority of the time. Prices trend for a little while and then spend endless weeks testing higher and lower boundaries. Our frustration in playing this market is really a matter of perception, not reality.