Today is Sunday, May 30th and I missed a couple of posts last week, but I am back.
In my last post on Wednesday, I said that the market was ready to push much higher as the market closed around 1056. The target area I called for was 1110 on the S&P and it was likely to take a couple of days. Well, on the second day, we came up to 1106.75, call it 1107 and within 3 points of the target area before it started to back off. On Fridays session after hitting the high mentioned, the market sold off towards the low of the day around 1087. Currently the S&P futures are up about 3 point at 1091 but it is very possible we will see lower numbers before we attempt to go higher, but not by much and for very long. I am looking at 1075 to 1080 as a possible turning point area. We will likely see some buying come in around those numbers. How the market reacts will be important as it trades into those area’s. I could see a good rally coming off of that area if hit and it is possible it could take us up to S&P 1130 this time over a short time span, about 2 days. That is where we will see stiff resistance, from there? This is just what I see as a possible market move and it would be within the realm of a natural rhythmic market.
The sentiment numbers were out on Thursday evening for me, but released on Wednesday morning and they were lower yet again, a good sign for the bulls as it gets now within striking distance of yet again another sentiment reversal. The bullish sentiment of stock market newsletter writers for the past four weeks starts out at a bullish extreme figure of 56%, followed by the massive sell-off we had right on cue. A figure of 55% or greater is usually a strong tipping point. The next three weeks we had all lower figures of 47%, 43.8% and last weeks 39.3%.
This latest figure is now very interesting as the market sentiment extreme is now closer again to a bullish tipping point of 35%. The way the market reacts on Monday and Tuesday will set the tone for the new weekly numbers that are released on Wednesday morning and if we rally big, that could send the sentiment back to neutral, 45%. Professional market newsletter writers are really no different or better at picking the markets major turning points than the public. They are all trend followers and always have been. The thing is, when the market makes its intentions obvious to the public, it is about to turn and go in the opposite direction. A simple and yet effective tool for trading against the public. All of this is not so critical as short term day traders, but its a good exercise for all followers of the market to look at weekly, daily and hourly charts to see and gain insight into where the markets next large moves will come from.
Below is a video I posted last week on U-Tube and am posting it here. I have been showing one of the timing tools I have available at Sniper Day Trading. I do not say what it is, but want to post this video, to show traders that it is possible to time the market and be successful at it, using the right tools. I have a few other things up on my personal screen, not shown here, which makes for a complete view of how I can handle the market. This is in my Trending T-2 model and works well, when the market is moving. When we are range bound and the moves are small, I just trade out of a different screen with a different set of objectives and goals. If the market is likely to make a move and reverse, it is best to take a all in and all out approach. If the market is trending I often times like to scale out of the trade and average the position out. The market always gets to decide. Either way, hitting a daily goal of 2-4 points per day is not that hard and can usually come rather quickly.
Trading is knowing when you go long and when not too. When to go short and when not to. As I have mentioned before, knowing when not to trade is just as important as knowing when too. If your timing is off, you loose. If your timing is good, “Bingo”, you got it. So, being able to say no to a trade that you may want to enter if vital to your success. Do you have a map or guild to tell you with some degree of consistency that you are making the right decision or are you going by just a gut feel. The later, will play games and tricks on your decision and you will often question yourself if you don’t have clear rules for entry.
With all that said about trading indicators, I feel, every trader should learn to read the price as it moves, thus the term “Price Action Trading”. If you know how to read the price of anything, you will more closely know why you entering long or short. Learning to read the price takes time, and often traders are not willing to put the time in to educated and expose themselves to all the different reads, tricks, fake outs and natural rhythmic moves the market can throw at them and that is where trading indicators can help, initially. As time goes by you will get the exposure you need to be well grounded and thus a profitable consistent trader.
The video’s are only to show you what is possible. You only need one or two of these trades per day to make very good money, not thirty. So, again, many systems or trading methods don’t show you how or even a part of how this can work for them. I am glad that I am able to show you something to help you better see, again, just what is possible.
Above, is another video of a stock and I cover three days of typical movement here. I basically mark up the screen of every trade signal through out the three days and again shows you what is possible. This is in my T-1 Trade screen and is geared more for short term swings with an occasional runner. You only need two or three of these trades a day to make a good living not all the ones as shown.
Related posts:
- Price Action Trading Defined
- Price Action Rules When Trading the Markets
- Day Traders, read the current price action !
- Reading Price Action in Any Time Frame
- Price Action Day Trading
Tags: market sentiment, price action trading, trading indicators
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