Today is Tuesday February 23rd and the markets are seeing the selloff that I saw coming the other day.

This is the sell-off I saw coming the other day, but it got a little delayed by the Fed announcement and maybe other things. The market did not want to go down on cue and thought it would hold up a spell to get some on thinking that we were going to continue straight back up to the top.

That may happen, but things don’t usually move in a straight line, at least not at this juncture. This move down is actually a key component to establish the next move, which ever way it decides to go. This move down will be the road map as to the next move as in a game of chess. The players are just positioning their men to take down a bigger army. Who will win the battle? Then next, who will win the war? Those are questions we are not able to determine at this time, but this setup is key.

The sell-off in my estimation, has at best, a little more to go. We are establishing a pivot point that is going to determine the next move. It is possible that we just continue the sell off down and take out the previous low and then some, but something is telling me that may not exactly happen. I always say, that we need to keep an open mind and look both ways before we go into traffic, so we don’t get hit. Get it wrong and you could be road kill. Don’t have it all on the line, not ever, no matter how sure you feel you are about a move. That said, the possibility exits for this kind of scenario.

Tomorrow, we continue with the sell-off after the market get the unsuspecting to bit on a rally long. The day has the makings for a trend day short after the initial up move. To everyone’s surprise sometime before the end of the day, we get large buying interest and we close well off our lows. This sets up for a reversal day rally the next day and over the coming days we challenge the pivot high that was established today and take it out for a sprint back up to the previous highs recently set.

That would be quite a spectacle for the trading and investment community to see. The market sentiment is a bit too weak for a sustained down move from here. Don’t get me wrong, anything can happen at any time and we always need to remember that, but this to me seems like a senario that would currently take many by surprise. As of last week the professional newsletter writers were only 35 % bullish. That is a figure that in the past has sparked rallys of significance. Now with todays sell-off, they made their new poll numbers as of the close of todays sessions. With it being a large down day, we could see many on the fence jump into the bearish camp and lose heart for this bull move. That could influence the market sentiment even more. Those people send their market forecasts to the public all across the world, giving them there call for the stock market, as well as numerous instruments. The main thing is, that they are usually wrong and giving that advise to the public at large, gets them to make the wrong call as well and lose money. That is just how it works, always has, always will. The majority never get it right and that is something that can be tracked and traced, amazing.

The above scenario may or may not happen,  but I think there is a good chance it will. They may try to hold it up for an extra day before it plays out, but we will see.

Today I just took a couple of trades and have a chart of it below. The first trade was for 1 point short and the next trade was for .50 point and 1.50 points. The larger portion was on the second half and was enough to get my daily goal. It only took about 15 minutes, which is what I like. Get in, get out and be done with it. I know without a doubt I could have picked up a bunch more points today. The price action was real good. The volume was high and the market was not messing around with all that slow action or no action I should say in the afternoons as of late.

It was good to see a little life. I am sure it will pick up as soon as the right catalyst triggers it. Picking up a few points in all of that action is not really that hard. Timing is the thing. If you think about it, that is what stands in front of so many traders who are on the verge of bringing it together. TIMING. Do you have it and if you don’t, how do you get it.

Many times traders do have it, but they just dont’ know exactly how to line everything up. Many have tried and tried, but it seems to just slip through their fingers every time. Having belief is often not enough.

Every trader needs to have a written plan of action to trade the markets and do it successfully. No plan, no success. You can not leave this to chance or a feeling. You need to be able to duplicate your efforts again and again. That means you need to do the same right thing again and again. If you don’t have it written down, how will you know if you followed it?

Excellent timing is the key. When to go long or short and when to wait. Waiting is itself a “Trade”. When you are waiting that is a trade decision and is just as much important as putting one on. Getting your first trade right in the session is very important. Exercise excellent timing, relax, take a few deep breaths and get plenty of oxygen in your lungs and wait for it to come to you. When you see it, don’t wait and second guess yourself, “TAKE THE SHOT”.

Good Trading, to all !

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Tags: 35% bullish, federal reserve, market sentiment, newsletter writters, stock market, timing