Today is Thursday September 2nd, 2010 and we saw a little more follow through from yesterdays big run up, + 8.25 on the S&P , +50 points on the Dow and +23 on the NASDAQ.

We are almost there, the 1100 S&P figure I have been talking about since last week, one more day should do it. That is my short term target, with a possible pull back following. That would be the normal progression of things as we move up to that 1100 resistance area on the S&P, then to move back to around 1165/1170. That would be normal and natural for the market to do that. What happens after that is going to be the big move, if we move back to the 65/70 area, then move up off that, you will have SOLID TRADE POINTS to trade off of.  Every trader in the world will looking intently on that next move as the market will be getting SQUEEZED on both sides. Huge positions will be taken at that point. All the bears will be loading up big time as we are coming into the worst trading month of the year. Actually, September is a worst trading month overall than October. A lot of the big market crashes took place in October and that month is fast approaching as well.

One thing first, tonight after I post this blog, this weeks sentiment numbers will be out again and if anything significant is out, I will post again those numbers, but from last week the numbers would represent some bullish fuel. I can’t say for sure how the market will express itself, but a lot of people are calling for a market crash here and now. The question is, are they right and if so when will it happen.

I have made my opinion known pretty clear over the past many months. What is happening is exactly what I thought would happen as we came off the March low’s of last year. Everything is literally exactly as I said then and is now. I have changed that up just a bit as the next part did include a new bigger market decline that will last for quiet a while, but I think that is on hold right now. I can’t see the majority being right about that market call. It rarely ever happens. I could happen this time, who knows, but going by history, when only 33% on Stock Market News Letter Writers who have 100,ooo’s of subscribers collectively think the market will rally, that is a small minority position and good tell tail signs that they will get it WRONG. That is one of the catalysts that helped us rally off the recent lows. So, I am temporarily on the other side of that camp, but for how long I don’t know.

The market will collapse here sometime and hope it becomes obvious to me at that time, but probably not to the majority. I saw all the big market collapses coming in the past, not to sound cocky, but its the truth.

I will hold a few special sessions on markets of the past and how it relates to our current market and what we could expect, so look for that in the coming days.  It’s no fun talking about large equity declines, because it helps no one, but if you know something is coming like an iceberg it is normal and the right thing to do, to warn those you care about. That is what I will be on guard for in the coming days, weeks and months ahead. I know the dangers, but I think we will get through this period short term for now. Since I am on the subject, if the last market lows get taken out seeing that we have come up off the bottom nicely, you could expect to see a 1,000 point drop in the Dow and about a 100 point decline in the S&P futures in short order. That would put the S&P at about 940 with that drop happening very quickly. That is not likely to happen right now, but for some unknown reason, war, this or that, comes out, the 1040 S&P area is clearly defined and will be cause for a release of energy to those levels. Just keep that in back of your mind or right it down if you like. I do need to say, this is just my opinion and should not be considered investment advise.

Above is a chart of my trades from today. I did OK, with the first trade a loss as I to often get wrong. I need to be more patient on my first trade. Starting later in the session is not how I envision the perfect day. Right at the slow time of the day. The two hours in the middle of the session is very slow moving and can try even the most patient day trader. The first two hours and the last two hours are usually very active and what you want. Trading the two hours in the middle is not really advised, although I do it all to often. Next week marks a time of new beginnings for me as I see myself trading the first hour of the day and that’s it. It is a nice thought anyway, but one I will keep trying to do.

The price action did pick-up at 11 am West Coast, as the big traders came back into the market. We need those guys to move the market one way or another and they always seem to do a good job. Our job is to identify which way they want to take it and get in on it. Sometimes its a hit and run for a point or so and other times its a runner.

The last trade was a bit of a runner as I held on through a painful pull back. Normally I would sell some after a good push up to insulate me from a reversal, but I held onto the retracement and added on on where I thought was a low risk spot. My method said to enter where I did, but the indicator said to wait just a minute or so more. You can see in the chart above or in the short video below if you have time. I also point out all the other turning points as applied to just my idicators for the rest of the day.

Good Trading,  Vince

Alert: The new sentiment number are just in and it is a very bullish reading of 29.4%, another drop of 4 % back to back. You can see the report at this website link below and is also in the resource section of my website. This figure is the lowest reading since the March low’s of 2009, and can only be view as a lot of fuel for an unexpected market rally that is going to catch many by total surprise, but not us.

http://www.market-harmonics.com/free-charts/sentiment/investors_intelligence.htm

Related posts:

1. Podcast – March 2009 Market Overview
2. Unemployment Numbers to be released Friday
3. Podcast – April 2009 Market Overview

Tags: March 2009 low, market collapse, market sentiment, minority position