Know Your Time Frame

We've been pretty vocal that the market is likely to be choppy to end the year. After big moves like we've just experienced, we tend to see a period of contraction that can whipsaw many traders.

The most likely scenario in our minds is that we see a sideways consolidation in a regime of negative funding while spot flows remain intact. Patience and sitting on the sidelines when whipsaws are dominant on price action can go a long way in saving financial as well as emotional capital.

This message of "sitting on the sidelines" has primarily been geared toward a time frame looking ahead for the coming weeks and the next month.

But, looking longer term, there are plenty of data points right now suggesting this recent selling pressure isn't the beginning of a deeper correction, which remains encouraging for those with a longer-term time horizon looking out into the next quarter and into 2022.