Today is Tuesday November 10th and all is well on Wall Street.
The Dow came within 54 points of 10,314 today and backed off just a little to close at 10,247, up 20 points for the day. The S&P cash market was flat, no gains.
There was not any news today and there is not any scheduled until Thursday and Friday but nothing big. Next week, there is a long list of important economic news items coming out, so I would expect volume to increase substantially and along with it, volatility. At the high-end of the range as we now find ourselves, it is going to be very interesting to see what the next big move is going to be.
Currently, the momentum is up. You have to give the benefit of the doubt to the bulls. Until a lower low is made you have to stay bullish. Just keep in mind, as I look at the chart, we are smack dab up against resistance right here.
The NASDAQ has pushed back up into it’s over head resistance as well as the Dow. On the 120 minute bar chart I put up yesterday, the Dow has hit that 7 or 8 times. It has not been able to go over it. It has bumped against it and rode the line, but it can not get over it. As time goes by, it inches slightly higher.
Will we see a catalyst to push it over current resistance, or under its most recent pivot low? One or the other is going to happen and with it, bring increased volatility, hurrah, that means opportunity to me. I was so burnt out on the low volume during the summer months. If you did not trade on the open, you could have been looking at a long day.
All that has changed, although this week the volume has been light. The S&P E Mini’s had only 1.7 million contracts traded. That is still slow. Between 2 and 2.5 million contracts is considered busy. Last year and early in the first quarter that was the norm. It is easy to get spoiled on high volume, but that is where you can bring it in. I don’t advocate trading for “Home Run Trades”, but it is nice to get one once in a while, to make up for struggling days.
All that being said, I usually find myself trading for a modest point return and call it a day. Today, I had two sessions. One, after the New York lunch time and the other towards the close. I have a screen shot of them at the bottom of todays blog. Trading small, not a big deal, but I did post a screen shot of the close with a couple of tools attached. I don’t say what they are, but it is interesting to see how it correlates for those who have not seen it.
The indicator on the bottom, is a custom tool I created and is designed to be used in conjunction with the other tools I use to build my screen, all of which is not shown. The tools shown and the other that are not, are all designed to work together and give you low risk entry points to capture one point and up trades consistently. The exits are clearly defined if you decide to hold for higher point returns.
Another screen I use is a “Scalp Screen” and this is designed to give you 4, 3, 2 ticks per entry. I use small stops when in this screen usually averaging 3 ticks but we shoot for a high winning percentage, which comes out nicely. Trading for 2-4 points per day is all I believe anyone needs to make a nice return, what do you think?
http://www.screencast.com/t/MDRlMzk3ZG
http://www.screencast.com/t/ZjI4OGJkYmQt
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Tags: Wall Street
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