Archive for June, 2010

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Market Sentiment getting closer to trigger point

Thursday, June 17th, 2010

Today is Thursday June 17th and the markets have marked time for the last two trading sessions and ended the day up 2 points on the S&P.

The markets have been quite the last two day, with yesterdays session flat and today’s up only 2 S&P points. We came pretty close to the low end target of 1122 I called days ago with today’s session high’s coming in at 1117 and change.

The market sentiment numbers were released this evening (2 day delay) and I am really surprised at what I see ? The market has rallies and that is what I expected, no problem, but the sentiment numbers have again slightly moved in the bearish direction (which is bullish, since the signals go in the opposite direction)  getting very close to a trading trigger point. Currently it stands at 37% down from 38.5 % and only 2 percent away from a trading trigger point. That is what I call it, when the numbers get to an extreme, in this case a minority position of only 35% of Stock Market News letter writers believe the market is bullish. That is the area that we see big rallies from.

The only thing I can think that may be setting up is, if the 1122 S&P low target area is hit, the market may back down, which is what I figured would happen,  but it may not crack as I thought it might after all, but the slight sell-off may give the impression of a bigger drop and the last of the bears jump in to send the numbers to the bullish trigger.

I will have to just wait on this one as its a little tricky. The main thing right now is to see if we at least hit the 1122 S&P number. We were 5 points away from it today and backed off. Over the weekend I will look at the Dow charts again and see what has happened and if I see anything very different.

In today’s trading I took 3 trades. The first one, I scaled in and scaled out and added on later in the move. The add on did not work out. I did not wait for right timing and tried to anticipate the move without any evidence for doing so. The last portion of my original position canceled out the add on position for no gain on that, but good gains from the others.

The next trade was only a small scalp trade that I took in my T-1 scalp screen and it was only for a half point. I wanted to get .75 but just took the small move. I could have skipped that trade all together as it was a bit risky. But my intentions were for only 2-3 ticks. The last trade was a continuation of the downtrend and my timing and entry was good. I have a video of the first trades and a NASDAQ trade that I put on at the same time that worked out pretty good in the video gallery section of the website, top right corner. In addition, I have a video of yesterdays first trades as well if you care to view them. Below is a screen shot of today’s trades for a quick look. To see a larger view, click on the chart and then click it again to enlarge the screen.

That’s it for now, and will pick it up tomorrow (Friday) with a solid trading lesson of some sort.


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Sniper Day Trading Method

Tuesday, June 15th, 2010

Today is Tuesday, June 15th and the market is on a roll, since the open, moving back up and over the last resistance.

So, I am writing this before the close of today’s session and we are currently up 19 points on the S&P emini futures and +165 on the cash Dow Jones and finally +50 on the NASDAQ.  So far a great day.

This is what I thought would come as I wrote about yesterday. I said that yesterdays reversal was not much to worry about as it was just some temporary overhead resistance that the Dow and S&P was encountering and so far that seems to be true as the market has broken out over all the overhead resistance.

I noticed a change in the resistance numbers, since the contract month changed and what was resistance at 1106 (what I mentioned last week several times) is now 1102.75. Yesterday the market came within one point of that, 1101.75 and backed off. Those that wanted to sell into the resistance early, jumped on board and caused it to come up shy of hard resistance.

We came all the way back up today and went through it, so far, by a few points and currently +21 points as we sit at 1107.50.  So, we have gone several points over the hard resistance and we are seeing a lot of short covering right now. Those that did not believe we would rally are also jumping on board, to push this up even higher. This will probably continue until we reach those numbers that I talked about in yesterdays post. The average was 1132 S&P emini futures (low was 1122 / high 1042).  Once we get into that area, plus or minus, you should be very careful with long term positions and such. This is just my opinion and is not considered investment advise. But my opinion is as laid out clearly in yesterdays post.

Another update 12:47 West Coast, +24 points and trading at 1110. We will soon hit S&P futures 1122 to start, likely in tomorrows session.

Trading the daily or weekly charts is no different than trading a small tick or volume chart on the index’s or any other trading instrument. It is knowing what the market does time and time again, with advances and retracements. How it deals with support and resistance and the likely moves there after.

The markets always have a certain flow and or rhythm tied to them. It throws off a vibration, as does most emotionally tied instruments. Dialing into the frequency is what will take you home. That takes time to uncover, but it is a skill that can be learned. You often have to think in reverse, since if you use human logic you will most often come up holding the short end of the stick. The patterns and setups in the market place are 100% repeatable and they happen every day. I see it as clear and plan as day. It is no different than picking up the newspaper and reading the headlines.

On the flip side of that, if you don’t know the language, you will misinterpret what it is saying. It would be like thinking you know how to read and understand Spanish, but you only took a few classes, although you are sure you got it down.

Well, I hate to break it to you, but you will need a lot more schooling than that to understand this language. If you have a good teacher, and one that is dedicated to your learning and if you are willing to put in the time to learn this language, than you will over time be able to communicate and understand what is being said. With that, you will be able to get to where you want to go in your trading career.

With the knowledge and confidence of being able to handle yourself in the trading arena, you can write your own ticket. Do not underestimate what it is going to take. I know many try and figure it out on there own, for various reasons, but that will not get you “home” until very late in the day, if at all.

I will admit, I was one of those people. For so many years I learned through trial and error, with lots of error. I never purchased a trading system or method of any kind, never a newsletter, never anything trading subscription related  other than data feed, since I have been following the markets, the early 1980’s. I am not proud of that, but it is what it is. I think, I had a touch of “Pride” — “Ya Think”.

If I did, I could have cut the time it took to understand so many of the trading concepts that I enjoy today. You don’t have to wait that long, but that is a personal choice. The trading knowledge will not come to you so easily as there are so many trading styles and ways to trade. How do you know which one will work best and or, if it will work at all.

That is why I have over the last few months been trying to show my readers the correlation of just two trading indicators I have up on my screen. One above and one below. They match each other closely as well as link up to other larger time frames, (not shown).

I don’t and can not show my whole screen because that would be giving to much information and reserve that for people I am mentoring. What I show is a “Tiny” part of the whole trading method. There is a lot to learn. I have two trading manuals that cover over 150 pages with very detailed information on the whole of the trading method. I recently completed new DVD video’s, spanning several hours, linking all the method together. I send out updates at the close of the market, showing where the method entries and exits were for the day and why (very important for ongoing learning), so you have constant input of where you should be trading and again, why.  In addition to that I will work with any student who wants personal screen time to go over past, current and live data. I commit to working with any student until he or see understands the trading method in whole. All of this helps me as well become an even better trader.

Today’s trading, I went into the NASDAQ market again, as well as the S&P, results below. Video of S&P trades and screen shot of NASDAQ trades. Solid gains in both markets with little draw down, which keeps the struggle to a minimum.

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Scalp Traded The NASDAQ Emini’s Today

Monday, June 14th, 2010

Today is Monday, June 14th and we had a little reversal after a nice run up of 16 S&P points.

The market ran up on the open as it continued from its night trading move higher only to top out and pull back to end the day flat. The Dow was up over 100 points and actually ended the day slightly down -20 points.

I think the move was just a move off of some new resistance levels that were touched. On the S&P it came within a few points of that 1106 resistance number that I have talked about and only now becomes even more clearly defined. The Dow is facing the same kind of resistance once it hit its high in today’s session.

Over the weekend, I looked again at all the charts that make up the Dow Jones Industrial Index and I would have to say, that what I am seeing does not look good. I do see a push up as we are making happen right now and likely over the next week or two, but I do see resistance at those middle numbers I put out yesterday, 1122 to 1142. You can pick the middle of those two and say 1132, that would be the average. I am pretty sure we will see the market trade up to those numbers and I can not help but see weakness in the charts that say, we go down pretty big. It may not be a long drawn out thing that lasts till the end of the year or something, but a big move down to around 8800 -9000 Dow at the best and then a possible big move up, taking out our most recent highs.

That is a bold prediction and I am not sure how it is going to coincide with the sentiment numbers, but that is what I could easily see happening. The first move is now up a bit over the next week or two and then a sharp fast drop down, enough to get everyone and there mother to throw in the towel and get bearish, just as we get a short squeeze back up. This is an election year and I don’t think the “powers that be”, wants to let this market tank down to new lows. The first two moves, up slightly and then down big and fast. The last move, we will have to see, because I am a roaring bear long term, but later in the year or early next.

If things change, I will update and show why it may be different, but I look at the charts as if I was looking at a tick chart of the S&P and or any other trading instrument and it just looks like that is the way it is going to go down, no pun intended.

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Today’s trading was pretty painless, as I just picked up a few scalp trades as I saw them. All winning trades here today and did scale out with size as I kept trading. I did not want to dig my way out of a loss by taking a loss with size on it. I was going to stop, but one way to keep trading is trade smaller size, so your draw-downs will not hurt your efforts much to that point.

Later in the session, I decided to try and trade the NASDAQ market and see how its movements are. I have picked one chart below, the smaller time frame to show you the trades I took in it today. The first trade was a loss, but picked up several trades in a row after that, pretty good. I was trying to trade both ways as you can see in the chart below. Down, up, down – that one I missed, but was a good trade, then up, down, and finally up.

I don’t advise this kind of trading for most people, but I did it today. In the last 50 minutes of the day, I took all the directional moves except one, which got away from me and did not chase.

I took most of the trades at the market, because I was not familiar with the fills and it was just easier to go in at the market. The one trade that was not a market order was the one that got away.

The NASDAQ market is a smaller size market. The S&P is traded in .25 points and there are 4 quarters that make up 1 point, which is $50 or $12.50 per increment. The NASDAQ also moves in .25 or quarters and 4 of them makes up 1 point. Each tick or .25 point is $5 dollars for you or against you and 1 point is $20 dollars. I think a 9 or 10 tick stop is good when trading this market and may even be giving yourself more room on the trade when compared to the S&P. That would be $45-50 dollar stop per contract traded. If you can hit an 8 point move, that would be 8 x $20 x 3 contracts = 160 x 3= $480.  Your risk if 9 tick is 45 x 3 = -135 and that is pretty good. I do like the fact that you can have a 9 tick stop and 10 tick target or higher and get the commissions taken care of, because of the smaller increments.

Even at times if you are scalp trading and going for one to one, that is 9 tick stop and say, 10 tick target or 2.50 points for $ 50 x 3 (contracts) and $ 150. Your loss is the same and your gain is the same. You are not looking for a home run here. If you pick up 3 of those little moves, you have a nice wage for the day, but that is just scalping a small piece here and there.  My trading method can definitely do that and more for those interested.

I never got to the lesson on “Day Trading Goals”, and again got on about something else. We will try again tomorrow.  I hope you enjoyed the new information on a new market. This can be done on stocks as well, no problem and if anything,  is easier to trade than the index futures. More on new markets in the coming days, stay tuned.

Good Trading to All.

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Protecting Your Trading Equity

Sunday, June 13th, 2010

Today Sunday afternoon June 13th and this post is for Fridays market.

The market put in a nice day absorbing the previous days gains and that was good to see. The NASDAQ did the best at +1.12 % with the Dow and S&P coming up behind that. Everything is set for another big day. The NASDAQ market outperformed because it was lagging behind the other two, so now all three of the main index’s are about equal. Currently, the S&P futures are up about 6 points and it would appear in a position to try and take out the 1106 I had talked about for the last two weeks. A break of that will likely send us up substantially, S&P futures , 1122 to 1142 and or greater, as Fridays close was 1085.

Looking at  earlier triggers, I mentioned a break of 1073 will get this market moving up and so far we have had that. That move helped the NASDAQ market just get caught up and in line with the other index’s and still feel that the Dow and NASDAQ market will need to break up from Mondays open. From all indications, we will do that as the NASDAQ futures are up +9.50 point currently 5 pm West Coast Sunday. A lot can change from now until the tomorrows open, but a strong break from the open and holding onto those gains into the later part of the session will be viewed as very bullish and we will be likely on our way to the numbers I mentioned above. It is just to bad that we did not get under the bullish sentiment readings I was looking for. Close, but no cigar, Bullishness at 38%. I was looking for 35% or less to confirm a sustained move.

This breakout if it comes tomorrow, does not mean we won’t see a rally, it just means to me that it may not have full power and longevity behind it. Possibly, just enough to get to the 1122 to 1142 area, which is still a lot. Counting that in Dow Jones points, that would be 570 points if we get to the 1142 number and if you took it from my original long numbers of S&P futures 1073, that is 690 Dow Jones Industrial points if and when we see it.

I leave a small window open that we reverse this pre-market strength and trade off these numbers for a couple of days, but maintaining the trading range to help the sentiment get to its desired overly pessimistic position so that a real sentiment signal could be generated, one that will have bullish legs to it.

If I had it my way, I would elect for the later set-up and trade down for two days. The sentiment polls are taken weekly on the close of Tuesdays session and this again will give it a chance to trade powerfully to the upside if we see those numbers. The service is put out by a company called “Investors Intelligence” and I am able to get free delayed reading from “Market Harmonic’s”. They poll all the major news letter writers with there take on market direction and we look at those number and trade in the opposite direction of there calls. Actually, this is just a tool to give you overall direction and does not really help with the day trading decisions during the day that we face.

Above is an equity chart of Fridays session. I had two real large days early in the week and just traded small and for only about an hour on Friday. Being conservative at times is something every trader needs to gauge. I just know that traders suffer there largest and worst draw downs when they experience there largest gains. So, that is why I often trade smaller inside of a session as the day goes on and do the same inside a strong week.

It is easy to forget that you need to stay humble and never become arrogant or cocky, saying that this is easy and let your guard down in the process. This is my way of keeping my guard up and taking it one step at a time. Once you make the money from trading, that is your money. It is not the markets. It is never considered free money. You worked for it, by the many hours you put into your method or system. You need to guard it and trade accordingly to your plan. If you have a have light hearted approach to it, you will give it back and then some, trying then only to make yourself feel better by saying, “I am only down this much ( ? ) because the other was profits lost. Don’t think that way. In fact it is really better not to think about the money, but just be sure you are trading properly. Then it will not become an issue.

That is what we should do, but that is not what we do most often. We trade for profit and you need to consider and have safeguards against wildly re-entering in an area we feel is a turning point. Do not buck the trend unless you have very compelling evidence and know what you are doing. Never insist your will on the markets. That right there could save you thousands of dollars. If the trade is not “easy and obvious” as I like to say, stay away. Only trade what you know and when you have the “trading edge” and you will be far, far ahead.

I was going to talk about goals and goal setting as it pertains to day trading and or any kind of trading, but I got off on a tangent. Most often, I just start typing, and what ever comes to mind as I proceed down the page is what comes out. I hope some of it helped.

Good Trading and be back tomorrow with more.

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44 to 1 Up-Volume to Down-Volume Day for Stock Market

Thursday, June 10th, 2010

Today is Thursday and the market shot up like a roman candle in today’s session.

Nice move today as the Dow, S&P and Nasdaq moved up about 2.75% each, around 30 S&P points. Today was one of the largest up to down volume ratio days on record at 44 to 1 up volume to down volume. That is amazing and usually will signal a continuation of the move. That is a huge one sided route. Usually a 9 to 1 ratio is considered large, but 44 to 1 is unheard of. A good sign for more to come, lets hope.

In today’s trading I just traded small, only 2 contracts and made a few points. I considered taking the day off, as it is a little hard to trade on slow and low volume. I was trading during the slow time of the day to boot, O’ well.   The volume was split up to accommodate the new contract month. The S&P symbols are esu10 and shared the volume between the old and new.  That is the reason why the action seemed so slow. Tomorrow it will look like a normal day volume wise, but emini traders  should be sure to change your symbols as noted above

We are still slightly on a touch of resistance and will need one more little push to get things going. With that said, I have just seen the new numbers on the sentiment poll taken this week and it looks like it did not get to the extreme that I was looking for again, darn. It did move down 1% at 38.5% and was looking for a minority position of 35% or less to help trigger a bigger sustained move.  Who knows, we may go back down into the hopper for a little more cooking? Tough call. I will just have to follow the current price action and will keep you posted.

Short post today, tomorrow will have more time and will pick it up with some sort of trading lesson.


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The Trading Range is Set, Hold On

Wednesday, June 9th, 2010

Today is Wednesday, June 9th and the market is hoovering in a neutral stand, waiting upon its next move.

The general stock market moved higher only to be met with “Price Rejection”. That would be its inability to overcome overhead supply. It did make a run at it, of which I saw it coming. I also saw the the exact resistance area and started to lighten up as I came closer to my overall target area in today’s trading. I was looking at S&P 1075 as a destination point for the last rally. Once hit, the high was reached for the day and down she went for a -20 S&P point reversal,  closing -6 points on the S&P and -40 points on the Dow.

Well, the market held up over the last few days and that is a good thing. I don’t have a lot to say today, only that we will need to stay above the previous lows recently set to keep this rally alive. That low was established during yesterdays intra day bottom.

The market will turn very negative and continue its bearish move to much lower levels if yesterdays low gets taken out.  The downside line in the sand has been drawn. On the reverse side of that, given the fact that the market was able to rally off that very key support area, is saying there is a real good chance we could make it out of this, at least short term.

The sentiment numbers came out today, but I won’t know what they are until Thursday evening. I will update at that time.

To recap, I see big movement on the break of today’s high of 1077.25 and yesterdays low 1041. That gives us 36 S&P points to play with or 360 Dow points. I will be watching both of those numbers for an increase in trade volume and trade velocity.

Yesterday I posted a live video on U-Tube of the days action and is in the video gallery on my website. I will post a snap shot of the days results as well as today’s results below. Two real good days.

My first two trades today were for small losses on small size, then hit a nice small trade short and reversed my position at my original sell stop point, something I don’t usually do, and the market kept going where I added on for larger size, once the trade showed its real intentions.

The two charts are in my middle time frame and are exactly reflect the price action in relation to my smaller tick chart size. It is easier to post more bars and show more of the day this way.

Yesterdays trades, I  just started to take the small trades were I could. I think I took 3 or 4 one point trades until I saw a big move coming and got a little anxious and jumped the gun. You can clearly see based on the my custom trade indicators that I went in way early and was only asking for trouble. I did switch to my T-1 short term model for a tighter entry, but it did not help as the market was just not ready. I wanted to pull the cake out of the oven before it was cooked, not a good idea. As I state in my notes on the screen, I had the right idea but was early and a bit anxious. I hug in there and was not afraid to load up on what I originally saw and milked the trade for  about a 10 point S&P move. I followed it up for another little topper after that, a great day.

I have the trades marked up on both screens as to where the key turning points are and it is just awesome, as the turning points were crystal clear. You just need the courage to trade them and you will and would have been sitting pretty. I would bet in yesterdays market if I tried to trade the whole day, I could have gotten at least half of the 75-80 points the day showed in available points. That would be 35-40 points of profit in one days session.

It would take a lot out of me to keep up the concentration one would need to do that, but I can see it is possible. For every point in the S&P emini futures it represents $50 dollars. If you trade 3 contracts that is $150 dollars per point x that by 35-40 points and that is a little less than $ 6k in a single day only trading small size. I totally believe in a session like yesterday, that it could have done that. I just don’t want to work that hard, as it is possible I could loose concentration and make mistakes. It is safer to trade for a modest sum and move on.

Usually, I only trade for 2-4 points with an occasional windfall day, like yesterday. Today was somewhere in between, but would call it above average for sure. As I mentioned earlier, we can always make mistakes, not trade our plan and or method and let emotion take over. You can not expect to do your best if you get anxious. I have a tendency to come in a little early at times and those are the trades that I get stopped out. I and or we, need to remember to let the trade come to us. If you look at yesterdays trade chart below, you will see I totally jumped the gun. The trade indicators are there to help you not get out in front of yourself, to hold you back until you have the momentum on your side.

Entering to early most of the time is an emotional response of “fear of lost opportunity”. I have blogged about that before, but you can see a clear example of it in the chart. I can try and justify it any way I want, I blew it. I am not perfect and know that I can always do better.

Being a good trader is not about being perfect, that will never happen, but if you can keep your mistakes to a minimum and take advantage of the gift trades the market occasionally gives you, you can do well. Consider this motto on occasion as well.

Get in – Get out and – Be done.

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Tomorrow Trading Session Key to Future Direction – Hold or Break

Monday, June 7th, 2010

Just a short post today, I am traveling the next few days but will still be giving market commentary.

We did sell off a bit today and came down to about what I thought would be the maximum we could or should go if the market was going to hold up. The jury is still out and tomorrow will really be very important. If the market holds up tomorrow, there is a good chance that we could rally on Wednesday. The sentiment I know has turned bearish by a good margin with the unemployment numbers being a disappointment. I looked at all the individual Dow charts and it is a tough one to call. Tomorrow will tell the story as far as I can see it. The possibility does exist that we just break down hard right from here. Everything is right on the edge, literally. If the market breaks down as I have it marked on the screen shot below, you could see the numbers as posted very quickly. That would be about -1500 points on the Dow and -150 points on the S&P.

You have to look at both sides and that is what I did in the chart below. A upturn may really get started before S&P 1106 but that will confirm the move for sure. So, the line in the sand has been drawn and we only have to wait and see tomorrows session to give us a good clue as what Wednesday may bring.

It looks bad out there, I will agree, but this could be just the perfect storm to catch the unsuspecting? This is going to be conditional call as it often ends up being. If this, then that. If we break hard and close under 1137 on the S&P, I don’t see much hope, as the flood gates will likely be opened for a huge round of selling.

If we can hold through tomorrows session, I believe, the sentiment will be overwhelmingly bearish, which could set the stage for a rally in the opposite direction. So, hold your breath and lets see how it turns out. As identified on the chart, the current trend is clearly short. Going long before the evidence is in, would not be advisable and risky business. Give it a little time and it will become clear. That’s it for now, Good Trading.


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Possible Inverse Head & Shoulders Setting itself Up

Friday, June 4th, 2010

Today is Friday June 4th and what a ride Wall Street had today, as things seemed to be sliding all day and into the close.

It looked like someone was anticipating the reaction on the street as 3 a.m West Coast rolled around, the market started selling off in a big way. After the open, we saw a bounce after first dropping 30 S&P points from the high. The unemployment numbers did come out and they were good, but not good enough, as much of the gains came from short term Census jobs.

The S&P was off 40 points, the Dow off 325 and the NASDAQ off 64 points, roughly around 3.5% across the board. This was a big sell off and with only two more trading days before the new weekly sentiment poll to be taken this coming week  after Tuesdays close, the market may now work itself into a larger bearish position, as more of the Street will become bearish and we may finally get the market extreme I was looking for.

Currently the level of bullishness is at 39% and had dropped over the last three weeks straight, with last week staying the same. It is going to be interesting come Monday and Tuesday. If the market can contain the selling into those two days, there is a chance we could see a real surprise rally over that 1107 figure that I have mentioned two or three times. In the night trading last night just before the selling began, the S&P emini futures went 3 ticks over that price at 1107.75. It quickly reversed and went straight down from there. That goes to show, that the 1107 number is a very valid and strong number, that if overcome with conviction, will prove to be a trigger point that will ignite the short covering to kick in at a higher level. Just remember that number as we go forward. If we continue to sell off, it won’t matter, but there is a lot of worry out there and rightfully so. There is a total mess when you look at the big picture.

Going back to what I said a moment ago, if the market can contain any selling that may come in Monday and Tuesdays sessions, don’t be surprised if you see a massive reversal of all the losses from today and a whole lot more. Just realize that it is possible and that a complete wipe out from here is not a for gone conclusion.

I don’t talk a lot about patterns and technical analysis, not because I don’t follow it, but just the contrary. What we could be looking at is an “Inverse Head & Shoulders” if as mentioned we can contain the selling to no more than say 1150 on the S&P Emini Futures. Take a look at it, it looks just the same as an upright “Head & Shoulders Pattern” but in reverse. We could be working off the right side of the shoulder flushing out all of the weak hands that allow themselves to be overtaken by Fear. Once those traders, investors and everyone else have gotten shaken out, the market will then reverse back up, leaving them in the dust.

In addition, this Head & Shoulder trading pattern, has a tendency to exacerbate short covering rallies. The initial rally once it takes hold, usually is very fast and catches many by surprise. If things take shape as laid out, I would expect the blast off point to come in some time next week and as early as Wednesdays session. This will give time to sell the last hold outs that we are going down, which in turn will cause the market to bite them as they get left behind.

This is all conditional, in that the next two trading days we will need to hold, giving up no more than -16 S&P points and or -160 Dow Jones Industrial points. So, it can still go down and it would even be better if it did, getting the last of them to take the bait.

On the other hand, I too can not become sold out to my theory, because I to could be taken by surprise if the market were to crack the 1036 S&P lows. For me personally, I don’t hold any positions overnight and only day trade the short term market swings, so it is not going to effect me that way. I do hope my theory plays out, because it just means that there is more time before the market crash that I do think is coming. I can not say when that is and it may not happen for a while as things get strung out, but if I had to guess I would say September or October this year. Anything can happen and it could be now, but I say the odds favor later in the year.

Going back to the possible Inverse Head & Shoulders trading pattern that may be setting itself up, investors need to be prepared. If we do see that breakout and it is confirmed by the breaking of 1107 with conviction, that will be a pretty good spot to buy and hold stock for at least a little while.

In my own trading today, it only took me 30 minutes and 5 about trades to take what I wanted from the market and I was gone. Click on the chart above and then click it one more time to make it larger if you care to see the trades I took from today’s session. I could have traded for more and probably made more, but I had already done my extra work early in the week posting big gains. The last three days I have just been cruising and playing it safe. This is all apart of good money management for me.

Traders often have there biggest losses right after they have had there best gains. It is important to not get overconfident and let your guard down as you start to see some success. Once you have made it, the money is yours, it is not free money, you earned it. You need to guard your equity and not let it leave your account the same way it came in, but do not let fear hold you back from putting on the trade either. Trade what you know and leave all the rest.

Good Trading to All !

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Unemployment Numbers to be released Friday

Thursday, June 3rd, 2010

Today is Thursday and general market was up slightly with a strong finish into the close.

The S&P, Dow and NASDAQ markets were all up slightly at the close with a strong come back from earlier session losses. I believe there are unemployment numbers coming out tomorrow and it is expected to be an important figure which will propel the market big one way or another.

I did not hear the speech, but someone said that the President was speaking and made a comment about great unemployment results to come. He seemed to be upbeat about the news tomorrow. Well, let me remind you of a time that he addressed the markets before. It was two days before we hit the S&P 500 low of 666 on March 6th or 3/6.

The point is, two days before the market hit that bottom. I did hear a speech by the President that was so very upbeat and encouraging. He basically said, the stock market is a great buy, but not in those words. I had never remembered a previous president doing that, but it may have happened. Again, back to the point. Two days after that speech, the stock market shot up over 400 hundred points on the Dow and it has not looked back since.

Now, I had heard of a very upbeat speech that was given today about unemployment and that you can expect this and that. Well, he seems to have pretty good timing in the past, is he going to go two for two, maybe ?

The market is in a position to rally, but there is one thing I would have liked to have seen today that did not happen. I was hoping for lower numbers on the bullish sentiment that was released this week. It came in basically the same, around 39% bullish. That is not really good enough to get the call the I was looking for, but that does not mean we can not rally. Many times the numbers will push back and forth in the middle as a fight is taken place between the bulls and bears. Its just that when you get extremes, we often see bigger more predictable moves. OK, enough on that.

In today’s trading, I was trading very small, just 1-2 contracts. I was coming off a few days of very big gains and moved my contract size down to insulate myself. It did not change anything, as I still traded well and hit more than my daily goal. I probably traded for about 8 S&P points of total profit. Much more than the 2-4 points I shoot for on just a regular day.

There are times through out the week and month that I have been pushing it and I have done very well. I usually don’t like to trade for a long time. I know that it is often times best to get in and get out. If you have good profit for the day, book it. Go do something else or enjoy some of the freedom that trading offers you. Many traders will say, that they like the idea of being a trader, because it will afford them more time freedom. That can be true but only if you exercise it. Taking time away from the markets can give you a fresh perspective. If you trade all day, every day, you will get tired and burned out which can produce mistakes. You need to be fresh and on high alert. It is to easy to place trades out of boredom as the action slows down, so be careful of that.

As I say that, there is a place and time for study. It is important to get screen time in if you are new to trading. It has been said, that good trading is more like an art. That can be true, but you can learn this art or trading by exposing yourself to market data. I feel, every serious trader needs to keep learning and one way to do that is, by looking at past data and becoming exposed to different setups, reads, looks and situations. You can still do this while the markets are closed as you go over past data. There is a value to it, even if some think not.

Seeing how the market reacts in certain price action setups is important. You need to put your mind inside the price and feel the moves and try and experience what other traders may have been feeling for them to push the market up or down as you see it unfold. Again, this is past data and it does help. Looking now at live data is different, but if you remember what setups you seen that worked out before, you will over time, be able to identify them as live data unfolds or that is what you need to strive for. History repeats itself and that sure is true in the trading markets. Find the history of the past and apply it to the future. You will be glad you did as that is what will turn out a winning day, week, month and year.

Good Trading to all

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Mentoring Traders

Wednesday, June 2nd, 2010

Today is Wednesday, June 2nd and yet again, the market is responding to my calls almost on cue.

I don’t mean to get overconfident or cocky, but the market moved out as I so thought it would, +2.50% or +27 points on the S&P and +225 points on the Dow.

Just looking at the daily chart, told me that a likely move was ready. When I look at the daily charts, it looks exactly the same to me as when looking at a tick chart or small time frame chart. I have seen those patterns thousands of times and know what to expect when I see it in a daily chart. The look or read is the same, daily, hourly, time charts, tick charts, volume charts, they are all the same in all time frame charts.

If you day trade the market and look at small time frame charts and go back to looking at daily charts, you may surprise yourself on how easy it is to call and read any particular market. The reason is, you have been looking at hundreds and often times thousands of chart patterns and know what good structure looks like. This will not come over night, that is for sure, but this is the reason why I have been showing just one of the timing indicators I use. To better give you an idea of what is possible.

It takes time to become good at reading the market, because it does everything in its power to confuse you and make you think  to go against logic. Trading logic is is what you need, not human logic, because the markets own nature goes directly against human logic. If you have trading logic, you will know the difference between a real trading break out and false one.

Trading, is not natural for most people and it is designed that way, to make the unsuspecting fail. With that said, you can put the odds in your favor by improving on your timing. A traders timing is key to his success. A moment to soon or to late can make all the difference in the world.

If you were able to learn excellent timing, to trade any market or trading instrument, what could you do with that?  That is right, you could write your own ticket. That is what I teach those who will allow me to mentor them into becoming the traders they aspire to be.

Becoming a good trader that is able to make money on most everyday he trades is not easy, but it is achievable and don’t let anyone tell you different. It is up to the individual and there personal passion to overcome all obstacles, no matter what. You must be willing to change anything that is holding you back. So often, it is ourselves that is our worst enemy. We need to give ourselves permission to succeed. That may sound odd to some, but you would be surprised how many get caught up into self sabotage and don’t even know why or that it is even happening.

I work with traders to help them overcome what ever struggles or problems they are having. If it is technical in nature or if it is something that they are doing that they do not even know about. The bottom line is, if you have a passion to master the art of day trading and that can be with stock, options, emini futures and even forex, I can help.

What I do goes beyond just selling my trading method to those interested, I really care about helping you overcome what ever is holding you back. All of this helps me as well and it keeps me on the straight and narrow. I have become much better since I have been writing, teaching, mentoring and clearly defining all the elements of my trading program. My confidence has increased, but at the same time, I know better to stay humble and take each day as a gift from God where by I am able to live my dream.

I want to be able to transfer this to others who share the same passion for the game. When you give something away, is when you are able to receive much more. So, this is a whole lot bigger than just me. Times are difficult and successfully being able to trade for a living, offers hope to those who want it.            How about you!


In today’s trading I traded much longer than I usually do, but had some pretty good results to go with it. I could have done better, but when it was all said and done, I did over 4 times my daily goal. I did make some bad trades, but they were small. A bad trade is not a loss, but one that does not follow my method. One trade late in the day, got me as I was trying to close out my trade for a smaller loss but got filled on both, the better exit and the original exit. This is something that I need to watch and in a fast market can happen. I should have closed it out right after getting filled, but thought since I was in it, I would see what it would do. That is not a good enough reason to hold onto a position and it resulted in a stop out. Things like that are bad trades. When you try and make a mistake work for you.

I am looking for a continuation of today’s rally, for the rest of the week and in tomorrow evenings post, I will put up the new sentiment numbers I have been talking about. If they are at or under the 35% mark you can expect a continuation of the rally over the next weeks to come until the the excess is worked off.        Good Trading to All !

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