Today is Wednesday September 16th and the markets are still bringing it in.
I was wrong on a closing basis in regards to the pullback. We did get one and it was pretty significant, but not near what I thought we would get. Monday’s pullback was about 12 S&P points but most of it came in the night session, before the market opened. From there it pulled back up nicely and then some.
The markets are strong right now and that is what I have been saying since the March 6th bottom. We have had a few pullback along the way and I did see and call most of those. Last week I did say that I saw the upside around 1100 on the S&P ultimately, but we shall see. That is more closely the middle of the entire range from 1550, the high, to 666, the low and back to the middle around 1100, give or take a few. The market likes round numbers and given the strength and with the Dow being close to 10,000 it appears it wants to trade up to that number or close to it. In the S&P as mentioned, 1100 would match pretty close to a 10,000 Dow. It is a psychological numbers for sure and will be interesting to see how the markets handle it. You will probably get some fan fare on CNBC or Time Magazine or News Week. That is usually not a good sign if it happens. Lets just hope it keeps going somewhat unnoticed. I imagine that would be best for those with paper losses in there 401K’s. I would love to be wrong about the big picture. I hope it goes right on back to the top of the market at 1550 plus. We can all hope, but I think that is what it would be, hope.
The best way to handle it is, take it a day at a time. Seriously, the daily trend is up, the weekly trend is up, but the monthly is still actually down.
All we are doing, as far as I can see, in regards to the monthly, is coming back up to test the middle of the range. Until we find the middle and this market runs out of gas, we will have to see the daily action to get a better read on what will come next. It is all conditional, if this, then that. The this, is still working on it, so let us not be anxious and just read the swings inside the daily and go from there.
I and we, need to hold our opinions loosely. If we get to strong of a bias, we will not be able to take the trades as they come to us. It is almost impossible to trade against a strongly held belief that you may hold. So the moral of the story and I am speaking to myself, hold your opinions about overall market direction loosely. That way as the set ups develope, you will be able to trade in what ever direction the price action is telling you to without strong bias’.
I like to forecast the daily’s because it is something to write about and I know a lot of people follow it. As far as day trading is concerned, it usually is not something I use as a timing tool. I look at much smaller time frames and let the market tell me where to go from there. This time, I will admit that I did have a bit of a bias short and it did affect my decision making a little, but not a lot. Once I see strength, I try not to fight it. Ok enough on that.
I have a short 5 minute screen shot of the some directional turning points on a 233 tick chart below. I show on a clean chart only, no indicators or anything else, where my method would give the buy and sell points for the session. There is not as many trades as there would be on the 100 tick chart but still plenty to make 2 to 4 points for the session. One or two trades would do, rather quickly.
http://www.screencast.com/t/Z4PSvSrr77k Turning points on 233 tick chart for 9-16-09
Related posts:
- Price Action Trading Defined
- Price Action Rules When Trading the Markets
- Price Action Day Trading
- Trading Exercise – Read the Price Charts
- Price Action Trading – Key to Long Term Success
Tags: 100 tick, Price Action, trading indicators, turning points
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