Archive for November, 2008

I hate to say, I was right

Friday, November 21st, 2008

This is a strange title for my post and I don’t mean to boast. In my last writing, I stated that if we didn’t stay above the close of three days ago, we were going to go much lower by as much as 1-2,000 dow points. Well it’s been two days since the market failed and we are down over 900 Dow points. I hope it stops because it is not very good for the overall economy. As I stated before, as an S&P trader, it doesn’t matter what direction the market takes, just as long as it moves. Either direction is fine, but I would prefer up.

If you would like to see me trade live, drop me an email message and I can make the arrangements for you to tap into my screen to see and hear what I do. I like to teach, and this helps me become better at what I do for myself.

Below is a short run through of some of the potential trades that could have been taken for today. I will be showing more of these and more of my trades actually taken. This may give you some insight into my methodology and that is OK. There is a lot more to it, but here are some of the basics.

Have a great day,

Vince

http://www.screencast.com/t/M1ig3dQj

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Posted in Trading Turning Points | No Comments »

Markets are holding on

Tuesday, November 18th, 2008

Its been a little while since my last post, but I am back with a market update. We are holding on near the bottom of a consolidation area. There was a good trading day reversal last Thursday. The market was down over 200 points on the Dow and it reversed by day’s end, to up over +500.

That was a good day and it usually signals movement in the opposite direction, which would be up. Did you notice how I said usually, that is because we should have had some follow through. The point is that we did not and that’s not good. Friday and Monday’s trading saw a filling back inside Thursday’s trading range. We are now back to where we were at 11 am on Thursday, before the big move up.

It looks like it was a big short covering rally, which means people who expect the markets to drop, find themselves buying the short position back in the open market to close their position so they can stop the bleeding. That pushes up prices, but only after all the shorts have covered, then it starts going back down without them on board. Amazing.

This week will be critical in that the market needs to stay above where it now is. If it does not, I fear another sell off as big as the one we just recently had.  It could be 1-2 thousand points more to the downside.

There are a couple of things on our side, one of which is the Holidays are approaching and typically that has been a strong time for stocks in general. The other is that there are a lot of people very bearish on this market and that tends to be very bullish, (up). It is best to never put too much faith in anything other than price action. That is always the deciding factor, unless the market can move above and break the downtrend line that it is facing, it will have no choice but to break down. Again, if it breaks and closes below where we are now, I would say, look out below.

But as a day trader all of that does not mean good or bad because we only look for movement and if that movement is to the downside, oh well, go with the flow. I personally do not want the market to break down any further from here because it will have big implications for the economy. As it stands we are headed for some difficult days ahead in our economy.

Below are some of the trades that I took today. It was a fairly easy day in reading the market. One thing I would caution any and all who find themselves reading this blog when trading the markets:

HOLD YOUR OPINION ABOUT MARKET DIRECTION VERY LOOSELY. What I mean by that is don’t form such a strong opinion about market direction that you can not see clearly what the market is telling you. People can become blind to their own ideas of what they think is going to happen. Just let it happen and try not to buck the trend. Sounds simple but it can be hard. Everyone just needs to remember that and it is very, very important.

http://www.screencast.com/t/Gmd6tb2IyYx

http://www.screencast.com/t/RfutENr6X

http://www.screencast.com/t/w63JNRXFPd

http://www.screencast.com/t/3JzPxoA8

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Posted in Market Consolidation | No Comments »

Volatility Returns to the markets

Wednesday, November 5th, 2008

As I thought, the volatility has returned to the markets after the election. The last two days we have seen a return to some big moves in the market. It was expected.

The S&P moved from the inside day I had talked about to the upside by about 45 points (roughly 400 dow points). Today it moved right back down and then some. I have posted below the results of yesterday and today’s trading. Only trading between 1 and 4 contracts with 2 being the average. I will write more on Thursday about what is happening, so until then, enjoy your day.

Vince

http://www.screencast.com/t/XtWQf3bQ

http://www.screencast.com/t/FQQ1U4zh

http://www.screencast.com/t/5TfW5OWxGAT

http://www.screencast.com/t/nemDxDwpW6T

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Posted in Trading Volatility | No Comments »

Very light volume ahead of Presidential election

Tuesday, November 4th, 2008

Today, I saw very light volume and a market that did not know where to go or what to do. It was basically in a holding pattern until the market knows who is going to be elected. But let me tell you one thing, when we find the winner, boy oh boy. This market is going to go right back to his old tricks of BIG swings. It happens every election and I remember all of the past one’s. 

When George Bush was elected the night trading was incredible. The market was establishing itself for new policy in so many areas. The environment, oil, exports, on and on. Every category saw shifts taking place and I would imagine that this time will be no different. With an Obama win, you can expect a big surge in alternative energy stocks. Solar power is going to experience a big surge in volume as people pile in. Every one has their buy lists ready to go and with a push of the button the reallocation is going to take place. In addition, those expecting an Obama win have placed their positions already, but that could be premature. Who knows? But we will see shortly. Expect big moves and it could be to upside. My job at Sniperdaytrading is not to predict, but to interpret and there is a difference. Once something happens, and as it is happening, we position ourselves to take advantage of the movement and thus the profit.

Below is a small sample of some trading chart setups that I look for. This is a very small sample but when I see these setups I move on them to capture my piece of the pie.  After that, is a small section of trades that I took today. I have notes next to the trades showing if it was a winning trade or loss. This small section of time is only 20 minutes, but a lot can happen in such a short time. Take a look for yourself.

Enjoy,

Vince

http://www.screencast.com/t/uR0XutHp2

http://www.screencast.com/t/jxZCIipcC4D

http://www.screencast.com/t/ByMOh7Ars

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Posted in Slow Market | No Comments »

Keeping it simple, in a difficult environment

Monday, November 3rd, 2008

As I stated in my last post, you will see the same patterns every day, up and down. I am capturing small winning trades every day with positive results. You need to be able to open your mind up to the possibilities of taking trades in the down direction as well as the upside. We do not care in what direction the market moves, but only that is does.

It sure is doing that these days with some very large moves. Sometimes I catch these and other times its just a smaller move. The best part about my method is that there are many places and times to be able to get in. There are a lot of great signals in the early morning open. The first 30 minutes of the day is some of the best trading although it’s really good for most of the day, but it can be a little slow during the New York lunch time, 11 am to 1 pm eastern standard time (9 am to 11 am west coast time).

Look again at a few early morning trades I have posted under this article. Also, I have some nice screen shots of a classic trading chart pattern setup that I look for. There are many great trading chart patterns to look for and some of these will include “Flags, Pennants, Wedges, Triangles, Channels, Head & Shoulders” and more. You can learn to trade all of these with no indicators, but with just trendlines, as in the examples I have below. Learning to trade without indicators is really a great skill and I highly recomend people interested in trading take the time to explore it. I have all of this broken down in the training section of my website. For the time being, I will be posting some of this training on my blog. This is not meant to be a complete explanation, but just a small sample to give you an idea of what you can learn.

When trading futures as I do, you don’t have to trade all day because of the leverage involved. The idea is finding patterns that happen over and over and being able to capture a small piece of that move. The key is finding patterns that consistently repeat themselves so you can take advantage of them by positioning yourself in the right spot where small mini panics take place. I have said that before but it is key in understanding how the market works.

A basic way to think of this is, “Support & Resistance”.  Resistance is where there is a barrier where prices seem not able to advance. This is because there are no more buyers at that price and selling pressure ensues to take prices down brought on by profit taking. My method is such that we can easily spot where those turning points are. One of my custom indicators is set up so that a simple change in color more easily shows you that a shift in momentum is taking place. This is just a tool to help you see what is already present in price action. Just remember that “Price always rules”.

Tommorrow I will discuss Support and take it from there.

Vince

http://www.screencast.com/t/F3AdFKR1sE

http://www.screencast.com/t/HjUf8PKeEdI

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Posted in Slow Market | No Comments »