Today is Wednesday and the S&P 500 had some legs to yesterdays run up.
The Dow Jones finally caught up to the other index’s today. Initially it saw resistance, which can be expected, but it came back and moved up 25 points over its January highs, 10,767 and then sold off. This is so very typical. Now that the Dow reached what the other index’s did a week ago, it is going to be pretty interesting how it reacts from here.
Last weeks sentiment number were up a bit +3% to 45% bullish. That is pretty much what one can expect after coming off an extreme reading like we had a couple of weeks ago and currently is a neutral reading. Once it reaches an extreme on the bullish side, you can look to lighten the load as more significant selling will come in. The thing is, we at this time don’t know how far it is going to advance.
With oil prices increasing that is sending a message to America that the economy is strengthening, at least from where it was before. I have been hearing things on the street about commodity prices in general. It is very possible that we will see large run ups in commodity prices in the coming months. That is not usually how it goes for a struggling economy. My hope is that everything keeps moving along and any significant drop is put off until a later time, like next year or after, would be nice. Lets give America a break, not “break them”.
This patch work is only going to be temporary, but I guess I welcome it, for everyone’s sake. If you want to see the real state of the economy, go to my website front page and I have a link on the right side which shows an ongoing tally of the National Debt, but under that is a warning. “Expanded View” – “Click here at your own risk”. I give the warning for real, its not a joke, because if you look at all the spinning numbers and totals associated with the items just on that one page, you will be filled with many emotions, I will just leave it at that. The bottom line is the real shocker, well, all of it really is, but if you would rather not know, “Don’t look under that Link“.
The last couple of days I have been showing a limited view of one of the trading screens I use during the day. I call this my T-2 Trading Screen. This screen is showing just one chart of two that I have up and is designed to find the turning points of the day, but give you a zoomed in view of it, so a trader is able to zero in on the exact point the balance of power has shifted.
The trading indicators I use help to show just that, as you have seen over the last two days. I will show yet another day today for those who think it is luck, that the turns are shown with such precision, almost magical. When the market is on the move, this is so very typical. When it is not (on the move) and we seem to be range bound, up and down, small or choppy moves with no follow through, all one has to do is just trade out of my T-1 trade screen for scalp trades of 1 point or more at a time. This part is just that simple. The market is moving, trade the T-2 for larger trending moves, with the possibility of pyramiding your position for maximum gain. When it seems range bound, trade out of the T-1 screen and take what the market gives you. If you get it wrong and are trading out of the T-2 screen and the market is not trending, you can still make a nice return trading the turning points, its just that they do not have extended moves to them, which will limit your total point return on that one trade. If you scale out of some of your position, you will always make a profit even if the market comes back against you. At some point, you will see that taking trades out of the other screen may be better and a “All in All out approach” would be best. Either way, it comes out in your favor.
Take another look below at the short video and see for yourself if you think you can place an order in the circled area’s I call turning points. I have placed a number above those turning point area’s which represents the amount of time you have once a turning point area takes hold, to when it moves out of the circle in the desired direction. The circle represents your window of opportunity and the amount of time you have to make a decision. You will see 3, 2, 5, 1, and so on. Again, ask yourself, do you think you can place an order to buy or sell inside of that window and take advantage of the trend. Your exit can come from several different way, with a couple of them shown. The first way could be a price bar color change and the next could be a reverse signal as indicated on the screen. There are a three other ways which are not shown, all similar in results, but non related, still all very visual and easy to interpret.
With all of that said, trading takes practice and your confidence needs to be high. If you give yourself the tools it takes to build that confidence, you can put it together. If your tools are shaky and inconsistent, you really don’t have much.
Just think what you could do in $ returns if you can buy and sell in the circled turning points area as indicated in the video’s. This will always work because this is a reflection of price action trading. I teach how to get the exact same turning points without the trading indicators and it matches perfectly. If you have questions, email me, I will be happy to answer them.
Related posts:
- Trading Indicators only Reflect Price
- Day Trading Indicators – See the Difference
- Price Action Trading & Trading Indicators
- Trading Indicators – Part one
- Trading Indicators – Part Two
Tags: range bound, trading indicators, trading screen, turning points
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