Ready For the Next Big Move?

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( The LFB-Forex) -- Another session of knee-jerk, reactionary trade goes onto the book, as the eurozone financial landscape continues its daily morph from one iteration to another. Having instigated a short-selling equity ban in the summer that did nothing to halt a bear-market slide, the EU has implemented a naked short ban on Credit Default Swap contracts, in an effort to tighten the spreads on credit default risk.

It has to be noted that market intervention schemes rarely, if ever, work for anything more than a brief period, and just like the short-equity ban, this latest attempt to slow the cost of insuring debt is likely to create more volatility over the long term than if it had been left alone.

The downgrading of Spain, and the threat of French sovereign downgrades have for the time being been ignored by risk and equity markets. However, it remains highly unlikely that another downgrade will be aimed at one country, with the next rating agency move targeting multiple sovereign bases.

Add in third-quarter earnings results and mutual fund year-end approaching on October 31, and the near-term landscape looks ever-more volatile and unappealing for those without a comprehensive plan of how to get from here to year-end. In all of this, the Trade Plans posted for client access at 17:00 ET each evening have captured the majority of the intra-day moves for those looking at set-and-forget orders, while mid-term trade signals continue to struggle to form.

Commodity Update -- Gold: Support 1605, resistance 1705, neutral 1655. Silver: Support29.80, resistance 32.50, neutral 31.60. Oil: Support 84.25, resistance 90.80, neutral 87.60.

Equity/USD Update -- S&P 500: Support 1195, resistance 1240, neutral 1212. Dax: Support5810, resistance 6140, neutral 5870. DXY: Support 76.60, resistance 78.20, neutral 77.40.

forex update -- EUR: Support 1.3665, resistance 1.3940, neutral 1.3745. GBP: Support1.5620, resistance 1.5925, neutral 1.5720. JPY: Support 76.40, resistance 77.30, neutral 76.70.

Investors are seeing the impact of the trade desk warnings over the last three years as a new-normal trading environment, which is dominated by headline-seeking algorithms and high-frequency trade, sets a repeatable pattern of trade that is far from the halcyon days of stair-steps higher and long-ranging trends.

It may be no surprise for many to learn that average daily trading ranges on the main global asset classes are increasing, with 3%-7% of movement a day and 2%-4% movement in 30-minute time frames now common.

The real frustration for those without a plan or investing foresight is that the increased ranges and volatility are not allowing weekly charts to move too far. The constant break-out and reversal pattern of trade is containing overall movement.

The S&P 500 is at the same price point seen in 1999, after spending 12years ranging between +15% and -45% at any given time. In the last 13 years, the strategy of buy-and-hold has been a waste of time and money, with negative real returns on equity indices trade.

The S&P 500 has lost 2.5% YTD, having been up nearly 8% at one point and down nearly 15%, after dropping 23% from yearly high to yearly low. In all of this, the daily trading range has been over 3%, the weekly range has been 6%, and the monthly range sits at 8%.

Most of any given session's 3% range tends to be created in response to breaking news headlines or high-frequency ramps, which house virtually all of the total daily movement. The new-normal has to be accepted because it is not going to change anytime soon.

The S&P 500 yearly loss is nothing more than one day's worth of trade, yet to stay in a long-S&P 500 index position at the beginning of the year would have required a 15% stop-loss to generate an 8% gain. As seen in the crashes of 2008, 2009 and 2010, most investors do not have that wide a risk tolerance and do not want to work with 2:1 inverted risk/reward ratios.

Buy-and-hold has been replaced with buy-and-sell, and those who are struggling to adapt may benefit from looking at futures contracts as a way to access 24-hours of price action, and to not be caught waiting at the bell for a move that happened overseas.

In the midst of the regional market chaos, because make no mistake, the daily price action in most asset classes resembles manic depressive/joyous high swings, the trader will tend to have an advantage on the investor. Those who are willing to buy the previous session low and sell the previous session high, and who have the time to adjust positions on the fly, or at worst, set a trailing stop to catch reversal swings, will tend to benefit more than those who buy and hold and run the roller-coaster ride gauntlet.

The LFB trade desk has create a library of on-line training video courses that are tailored to all level of trading experience that teach the nuances of global trade. Clients can access the course and workbook as many times as they wish while learning and creating a trading plan for current situation. If investing in the markets is not working for you, why not invest a little in yourself and get a plan of action?

This commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management. The London Forex Broadsheet (known as TheLFB) is a is a global forex trader portal based in the U.S. TheLFB's mission is to educate retail and institutional clients on the links that bridge the trader and investor to the free-flowing global market. It serves the needs and develops the skills of forex trading clients with its 30 years of trading and market experience.

TeamLFB maximizes a forex trader's day with support that instills discipline, confidence and structure, enabling the only daily variable to be market-driven. TheLFB service offerings include a mix of complimentary and subscription-based products that cover trade signals, professional grade currency and commodity analysis, comprehensive charting overviews, as well as daily trade desk video reviews. The trader news feed is a proprietary offering that gauges 24-hour market sentiment, guiding all levels of traders on the nuances of each new trading day.

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