Archive for 2010

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Slow Summer Trading Day

Wednesday, August 18th, 2010

Today is Wednesday August 18th, 2010 and the markets squeezed out a small gains on the  day with Dow up +10 and the S&P +2 points.

I took a few days off this week as you may have noticed. All is well, but just took a break from trading and writing as summer will soon be over.

The trading day ended up slightly as the market sold off near the close of the session. In a nutshell, we did get that bounce I had talked about last Thursday. I said that we should see a pretty good bounce up on Friday or Monday. It did not come on either of those days but on Tuesday where we saw a very nice advance across the board. The previous low should hold in my estimation at this point, but we will see if  Thursdays market has a retest coming. With the late sell off, that is what it looks like.

I could see the market trading to the 1080 area early in the session, where we should find support around there and try and mount another rally. Currently the S&P is around 1087. The S&P market should stay above 1075 and if 1068 is broken, more heavy selling could come in quickly.

The market has big overhead resistance around 1118. If it can get over that number give or take, much higher prices could come in, but that is the big barrier right now and pretty far off.  Also, it will be interesting to see how the Investors Intelligence market sentiment changed today as I won’t be able to see it until this time tomorrow, but will report any changes.

That’s it for now. I have a simple tick chart of the S&P emini futures below showing the early morning turning points as per my trading method. This is just as far as the indicators are concerned. We teach how to trade the price and use the indicators to confirm. Simple but effective. Until tomorrow, Good Trading.  Vince

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Day Trading for Income

Saturday, August 14th, 2010

Today is Friday the 13th day of August and the Index’s were down slightly -16 on the Dow and -3.50 on the S&P futures.

I guess the market needed to take a breather from yesterdays sell-off, as we did not go to far in the session today. A very narrow range was not exactly what I was expecting. I thought it would start to pick up, but it did not. The market went back to sleep. Come Monday, it is going to have to show its hand if in-fact the support from Thursdays market is going hold. That is key support and if broken, we are in a bit of trouble as I see it. I expect a bounce off this current level of at least 20 S&P points, maybe a little more, come the next few sessions. After the bounce, (if it comes) that is really the moment of truth for this market.

I talked about the market sentiment in yesterdays postings as the bearish sentiment dropped a lot. Last week we saw a 6% drop in bears as per “Stock Market news letter writers”. It went from 34% bearish to only 28%. That is significant, but the more important side is the bullish percent. That did increase from 38% to 41%, still a little on the light side. A figure of 35 is bullish and we are coming off of that now and a reading of 55 is bearish. This number does not have to get to the upper extreme for the market to sell off, just somewhere in the middle is enough. Tuesday the new numbers will be coming out and if we see a rally on those days, it could push the bullish camp to the middle of range and then the market can do what ever it wants from there. A strong signal a month ago has given only a modest market move, if in-fact this market is done, that I don’t know. One thing is for sure, one needs to play the price action as it relates. A big bounce will be setting itself up for a good predictive move either way at that point.

To better illustrate this, I have a “Daily Chart” of the S&P cash market up again as I did last week. I have new notes on it as I pointed out the potential for a big drop from last Fridays blog posting. Well, we did get the drop, now what. Go see the chart below and get the rest of the details of what we could expect.

In today’s trading, since the price action was so slow, I did not push it. I only had a few trades and called it a day. I had a little over 3 points gain and just 2 ticks of lose. It wasn’t to exciting, but trying to make something where there is little, is usually not a good idea. I could have went into scalp mode and tried to pick up a few more points, but when the prices are moving so slow and there is little volume, I really don’t like it. I would rather wait. My trades are below.

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Trading for a living is a traders dreams and at times dreams do come true. For this dream to come true, one needs to have a trading plan and a back up trading plan from the first one. Things do not always work out the way we would like, but having a trading plan to begin with, puts you miles ahead of other traders who have none.  Finding the best trading instrument is also something one needs to contend with. I find that trading individual stocks are easier to trade than the S&P emini’s in a general sense, but I enjoy the trading leverage that comes with futures trading.

I find that trading for income is much easier than trying to trade all day for the sake of trading. If its the money we pursue, than trading discipline and patients is going to be in high demand. Without a high degree of trading discipline and the patients to go with it, you will end up working against yourself.

Traders do not realize that they themselves are there biggest obstacle to overcome. Read that last line again. That is right, we end up derailing our efforts to often by our lack of discipline and need for action. If a trader trades for income, then he gets what came for and leaves to enjoy the freedom that day trading was supposed to offer, or that is how it is supposed to work.

With the high degree of trading leverage that emini futures trading offers, you really don’t need to trade all day. Consistency in capturing 2-4 points per day on most days, with windfall days 2-3 times a month, should do the trick nicely. If a higher income is what you want, mastering the daily goal is the first place to start with small trading size. After that goal has been reached, then slowly increasing your size to the desired income level is next.

If an emini trader could master the 2-4 points a day average, highs and lows, including loosing days, which is 60 S&P points per month, x that by $50 dollars per contract traded and you have $ 3,000 per month. That is your minimum profit for one contract traded for the whole month. It not a lot of money, but increasing that slowly over the course of a year, could easily take you to 20 contracts. Now that is serious money, 20 x $3,000 or $60 K a month.

Increasing is an option and has its own set of psychological problems, but those limitations are usually our own inability to allow us to earn more. Our own self worth needs to be evaluated and we need to give ourselves permission to reach all of our financial goals as our plan calls for.

To day trade 20 lots in the emini market a trader really only needs about 20k in his account to put on a trade with that size, based on the trading leverage that is available to him. Each S&P point is then worth $1,000 dollars. That is a lot of bread, but that works against you just the same. Trading with that kind of leverage is definitely not advisable, but for every 3-4 thousand dollars of increased profits, one could over 3-4 months find themselves at that 20 lot level. Even averaging 2 points a day (40 points a month) will get you their in 5-6 months and give you the ability to take money out of the market each week.

It first starts with us and our mental attitude. Controlling greed and our emotions, while we trade for income. This is a marathon, not a sprint. Keep your trading funds safe until you truly posses the trading edge, then live your trading dream. (Part coming next posting)

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Nice Profit Day, Even with a Few Mistakes

Thursday, August 12th, 2010

Today is Thursday, August 12th and the market was down today to hit that low side target called in last Fridays post.

I said last Friday that we would trade down to maximum 1075 to 1080 on the S&P and today we hit 1071. The market did trade past the mental target I had, but it came back quickly which is important. That shows that the market is likely to have found a short term bottom at least. Currently the market is trading up off its close for the session and looks good for tomorrow to be an up day.

With tonight’s aftermarket  break long of 1083 on the Emini Futures, we will likely see 1097 to 1104 either in tomorrows session or Mondays. The natural rhythm of the market should swing the balance of power back up to this level.

The market sentiment for this week saw the bullish side move up 3 percent to 41% and change, getting closer to a neutral standard setting. This rally here is what it is all about, if this rally fails the market is in trouble. We will need to stay above today’s lows. Again, if that gets taken out, I can not see how that is going to good for bulls, as heavy selling will come in for sure. Being objective and just reading the charts, that is how I see it. So lets hope for a big bounce first and a powerful push higher from here. If this rally looks and acts weak, that will be a sign of trouble. I believe, we should see heavy buying up to the numbers stated above and a very strong market to that point, after that, we will have to see.

The bearish camp dropped down to 27.5% and represents a 6% drop from last week. That is not good for the bulls. More people are getting bullish and less people are getting bearish. When you get a minority position, marked by certain levels, you will see a swing in the opposite direction.

One thing I believe for sure is that we will see an uptick in volume and movement. Even though this is summer and usually slow, I think you will see nice swing trades coming.

Below is today’s trades. The first shot is for this mornings trades and the second one is for the afternoon session. I did a video of the whole day and show all the turns with a little commentary. You can find it in the Video Gallery and should be the last one in line.      Good Trading, Vince

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Scalp Trading Chart in a Narrow Range

Wednesday, August 11th, 2010

Today is Wednesday, August 11th and we finally broke down with some conviction today as the S&P fell 35 points and the Dow -265.

Well, I wanted to post yesterday, but I had family come in from out of town and did not get a chance. I saw the market over the last few days holding up nicely and we did see strong closes at the end of these sessions, but something happened to kick off a ton of stops that were built up over the last few days of trading. I did see and wanted to say that a break of 1110 on the S&P would send this market down and a break over our previous high as a continued move up would decide the next market move, but that was just said to me in my head.

I put up a daily chart a few days ago and said that this break from the above area would send the market down to the 1075 / 1080 area and I see in the night trading that we bounced off that in the session. We are bouncing off that support low by 6 S&P points on this Wednesday evening at 9:39 West Coast. I think we will see some kind of a bounce in Thursdays session but the cash market is likely to trade down to the 75/80 area to fill in the gap from the futures. I would expect to see support in this area at least for the time being.

The up move over the last few weeks has been contained and I am in a just wait and see approach for now on the larger overall market direction. The best I will do is to just trade what I see for now. The market is acting very normal and a pull back from this move up is definitely not a surprise. The market can do what ever it wants to do and we all need to remember not to fight it, but go with it.

Below is the last two days of my trading as I was just scalping this market, especially today. I always remember after a very big drop of which most of it come in the premarket, it leaves little to trade for the regular session and the moves are often smaller. The majority of the energy was released in the premarket and as mentioned, left little for the opening. With that said, I decided to just scalp trade this market for short targets of which you can see in the charts below. Yesterday was a little better, but missed a few good moves, but not complaining at all. So I will be back tomorrow with more comments but will end it for now. Good Trading and be safe.  Vince

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Quiet Trading Leading up to F.O.M.C. Annoucement Tomorrow

Monday, August 9th, 2010

Today is Monday, August 9th and the market is holding up pretty nicely in the face of that large sell-off and recovery on Friday.

The Dow is up 47 points with 35 minutes to go and the S&P +5 points as this market comes into the close. Tomorrow is a big new day as the F.O.M.C. will be meeting to decide what the direction of interest rates will be. It may be that they leave it alone, but may comment on the current environment going forward. It should get a little spark in the market because today was the slowest volume day I have seen all summer long.  This is typical, but no one seems to like it.

The only thing one can do is be sure to trade the first 60-90 minutes of the day. There you will usually find the best volume of the day and the moves to go with it.

I only have a small posting today as I have company coming over and want to get this posting up. I did not trade as I had problems with my data feed getting my charts loaded. I have a video showing only half my screen loaded with the trade matrix missing, the most important part. I can’t trade without that up, so, I did not make a big deal about. I still did a video showing the days action from the open and did take it back to the pre-market. You can see the simple turns in the market as identified by one of my trading tools. I never say what that it is and how it works, but it is a tiny part of what I look at. We make buying and selling decisions on the price as it relates to the current environment, long or short, this indicator is just a guide. That is the only and best way to trade for the long term. What we teach at Sniper Day Trading, will last the test of time because this is how the market works going back decades. This style or trading method will never become obsolete or irrelevant in future.

Above is a U-Tube video I did of today’s action as it was in progress. I show the last move and called out the market top around 12 pm West Coast at 1126.75 / 1127 and the market when up to that tick and turned down by three points, showing that was significant short term resistance as called. You can take a look at the video if you care to. It is not earth shattering, but you can see the quiet natural flow of prices in a small tick chart format.

Look for the market to trade quietly until the Fed announcement tomorrow at 11:15 West Coast. Then, we should see more volume and movement as least for awhile. Good Trading,    Vince

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Daily Chart of S&P 500, What Do You See !

Friday, August 6th, 2010

Today is Friday August 6th and what a ride on the street today as we saw a big market reversal take hold in the last 90 minutes of trading.

At 5:30 a.m. eastern time, the market got a reason to sell off, as the jobs data came in worst than expected. There was hope that a higher than expected number would spark a rally, but gave way in the form of a let down. The selling could have been a whole lot worst, as the market shifted down a notch to a level of major short term support.

In the context of the overall move, we have not done any technical damage to the chart, as the market bounced right off of this major support. It does yet again, provide more room for an advance if in fact one shows up. The low in today’s market will be the line in the sand for now. Monday is going to be very, very interesting. If the market has it way and takes out say, 1106, just above the low of the day, I would bet that we will see lower prices over the next few days. There is upwards to 35-40 points under the market if the low gets taken out. So, that is the best way to forecast this market right now. If this, then that.

There is still very little bullish sentiment on Wall Street right now. This last week, the market sentiment data came out and it moved up to 38.5%. Actually, it stayed about the same, because last week, it had moved up a few %. Currently it is still very low and would be saying there is more to go. The market never moves in a straight line, or not usually, but for the time being, I can not overlook a break of today’s lows if in fact that happens. If that breaks, then, a big push to the downside is in order. It should be at least to 1084 and could be lower. The maximum I see is to around 1075 to 1080 and it could come in just a few days, but that is the maximum. There is major support at that level if only we break the 1106 area, just above today’s lows. I don’t think we have to break the low to get a market reaction that will temporarily send this market down.

With all of that said, the market sure showed some resilience, in only being down a few points after all the bad news and big drop. Some forget the wall of worry, of  the past. This may be like that, but this time, there is really something to worry about. All of our national financial troubles are really much worst than the mainstream media and government is letting on. I think the public senses that and is trading on there intellect.  Wall Street does not care how smart someone is, but only that they are in-tune with the pulse of the market. The majority is never right.

Above, I have a daily chart of the cash S&P 500 Index. I encourage you to take a quick look at it. You may see it a little differently than you normally would. I won’t go into it, but there is order in what seems like chaos. Knowing how to look at something is a start. I may post again on Sunday afternoon, but for now, enjoy the weekend and get outside and enjoy some of God’s creation. It can give a nice fresh perspective on life and our work.

As always, good trading, Vince.

P.S.  no trading for me today.  Relatives from out of town and have to many distractions

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Market Consolidates for another chance at S&P 1140

Thursday, August 5th, 2010

Today is Thursday, August 5th and the S&P was basically flat today with a .75 point loss, consolidating to better get to the short term target area of 1140 area.

This may not be the ultimate resting area for the S&P, 1140 but it is an important milestone on the way. Only time will tell, what lies in store for the S&P, but I still think there is more room for surprises here. Currently we are at 1123.75 as of today’s close and will still be looking for 1140 very soon. I would have like to have seen it today, but the market has its own timetable not mine.

I looked at directional changes late last night after driving 5 hours from the S.F. Bay Area and may have been a little premature on my target call of 1140 on the S&P sometime during today’s session. I think we have a better chance to get there for Fridays session, as we marked another day sideways, which will allow a better clearer path on up.

I can only see an upside resolve to the bearish bias of this current market. I want to be a bear, but I just can not at this time. This is the kind of flexibility one needs to ultimately be successful in the financial markets. One can not impose there overall directional bias onto the financial markets.  I am not that stubborn to admit I am wrong when it is so. Yesterday, the market was pulling back in the night trading, but still saw, the path of least of resistance as being up to the target of 1140. It did not happen in today’s market, but still hold out for the possibility of it hitting that in Fridays session. That would be about a move of 165 points on the Dow, to get to that equivalent level.

Time will tell, but if we yet still go sideways in Fridays market, it will still increase the chance for not only 1140 being hit, but higher prices yet. One thing at a time, and lets see how Fridays action panes out.

It did not matter much to me, by the early morning open, I could see that we did not get the upside break out I was looking for and managed to push higher on the open, but from lower premarket levels. The market clawed its way back up, to put in a nice daily reversal and closed in at the high of the day, a very positive sign for tomorrow market. The market had excess and I guess it had to work it off by shedding a few points, only to come back to it’s original spot of the day.

As mentioned, time will tell. In today’s trading, I did good and hit my daily goal with a solid posting of a few nice small trades. I did not trade large size, but it added up just the same. The screen shot below, will show how and where I entered this market to get my daily goal.

Very slow trading this week, as the market has surely tested the patients of many traders me included. We saw only very light volume but that which is very typical for this time of year. More and more traders are hitting the market early for a few points and getting out of Dodge for the day. I can see it clearly in the tape.

This might be a good clue for the rest of the month. It won’t be a bad strategy to make a few and leave for the remaining weeks of the month, but every traders will have to decide that for themselves.

As mentioned, my trades below. I hope everyone is enjoying there summer by getting outside and doing something fun. When summer is over, its over, so take heed of the opportunity while you have it. The market will still be here when you get back.

Good Trading to all, Vince

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Market ready to move again

Wednesday, August 4th, 2010

Today is Wednesday and we saw moderate gains again for the S&P (+6 points) and Dow Jones (+44).

The last two days the market has marked time by moving sideways for the most part. During this quiet time there has been a lot going on, even if it does not look like it. This quite time is just what needs to happen.

When you sit down for dinner, you eat, enjoy and wait to let you food settle. Well, the market has been settling it’s meal and I think it is hungry again, or that is what it looks like to me. I think we are ready to see new advances for the Thursdays session. This will be keeping with the spirit of surprise and amazement as this market just seems to not want to quit, or that is what they should be saying soon.

We should rally on Thursday, or at least that is what and how I see it. I could be wrong, but I see S&P at 1140 somewhere in Thursdays session. Currently in the aftermarket the market is going the other way. Here is a case where I believe we will see the market come back and sometime during the early morning session, we should be pushing into new high ground. That call would be the normal and natural move for this market Will we come back up several points to reverse and go higher into the morning session, time will tell. I could be w
rong, so don’t go out on a limb here on my say-so. I have been right so many times in the most recent past and will get a better idea by tomorrow mornings open, but I may not be up at that time to really comment.

I am just getting back home from a short trip to the S.F. Bay Area. It is about 310 miles one way to where I usually stay with family when I travel that way. It takes around 5 hours with most of the way traveling at 70 mph. Currently its 12:30 a.m. on now Thursday morning, so again, I don’t see myself hitting the morning session tomorrow. In addition, my wife has family visiting, to help us celebrate my 48 birthday on Saturday, not that its a big deal, but what the heck, why not.  Sorry there, I got off a tangent, I must be a little delirious from all the driving.

I did not get a chance to trade yesterday, but I did squeeze in an hour or so of trading today making some very modest gains. I have a screen shot below of all the trades I took today.

I cant’ say to much more, so I will end it. If day trading, be nimble and don’t get to strong on any one direction. The market can do what ever it wants. Just read the action and go with it. Trade timing is key, so trade with the rhythm of the market if you can find it.   Good Trading, Vince

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Reading Price Action in Any Time Frame

Monday, August 2nd, 2010

Today is Monday August 2nd and what a nice day in a perfect world as the Dow, S&P and Nasdaq markets put in solid gains across the board, with +208 on the Dow, +23 points on the S&P and +40 points on the Nasdaq.

If one went only by the news, everyone should be short as things don’t look or sound good on Wall Street. If you uncover the numbers, they are not that inviting, but we don’t trade numbers, or reports, we trade stocks and index futures.

I have been calling for a significant rise in the market for some time now and have been saying that the surprise will be coming from the upside. That is unfolding very nicely. I am sure there are bears, now running for cover. Those are the smart ones, cut your losses early. The ones who just know that this market has to go down, will be the ones who really feel the pain. It could be financial ruin for many as they hold on and on, just waiting for this market to turn, with hope slipping through there fingers each day. Pride, has often been the financial ruin for many traders and investors. When you enter a trade, you have to know exactly how much pain you can accept before you enter and never move your stop to a worst position. Justification, will soon be the thing that starts to kick in, as traders and investors will not throw in the towel, admitting they were wrong.

In addition to calling the larger overall moves by the market, I said in yesterdays blog posting that we would see 1115 on the S&P Emini futures in the early morning session. It could come in the night trading but a move to that area was very likely in the morning session. Well, that again, is exactly what happened. The market pushed up to 1115.50 and backed off that exact number by 5.25 points. The next part was for the market to continue higher from there through out the session and that is just what we saw.

In today’s trading it went good, as I picked up some nice gains from the sessions. Nothing earth shattering, but good enough. Just traded small, as I am marking time for better opportunities in the coming week. I am sure I will find at least one mega day this week. That is a day with 2 to 3 times or more a typical average daily gain. Having 3-4 of those type of days per month, can make up for a multitude of trading sins. A screen shot below of my trades today.

Being able to read price action is the key to successful day trading and or any kind of trading. I have said that many times before and is a valid point to be reminded. I like trading with trading indicators, but I don’t always lean on there every signal. I always balance my approach to what I know about support and resistance, as well as many other unknown trading techniques that I cannot discuss. I show these trading techniques in my video updates that I send to my students many times each week. It is so nice to see that so many of my students are understanding the trading concepts that I teach apart from any trading indicators at all and are able to apply them to the markets to get what they came for.

Recently, I have been expanding my trading concepts to include the ability to project where prices will likely go based off of many factors. One of those factors being the amount of stored energy in the trading instrument. That energy get reflected back onto the market in the expression of a long or short move, depending on the directional release of the energy. Many times you will see the market pull to the opposite end of the trading spectrum as that release gets played out. That is where and when you want to be able to position yourself in-front of that move. You then possess the trading advantage.

Depending on your trading time frame, a trader can do very well to hold onto large direction shifts in this energy. I am able to see these shifts in energy by understanding the price action trading that takes place on the trading screen. There is a reason why prices move as they do, it is not just random as some would say.

The recent expansion of this concept is what is giving me the ability to project future price action, with precision. I don’t always have to be right, but right enough to make it right. With good money management and having the ability to enter an S&P trade and risk no more than 4 or 5 ticks or a stock equity trade risking no more than .10 cents, gives you certain advantages over other traders.

Currently, my focus is still on short term trades, 1-3 points for many, with the occasional 5-10 point trade. Becoming a good day trader takes time and discipline and a good proven trading method. You need all of those, to make a living at this. If you are lacking the trading method and the discipline, I think I can help. The time, you will have to put in. Nothing worth while ever comes easy, but the rewards are outstanding.

Good Trading, Vince

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Mondays early move to 1115 on the S&P futures likely

Sunday, August 1st, 2010

This post is from Fridays session where we did see a pretty close prediction of what I had called for the early and later part of the session.

I said that we would likely move down to the 1080 ( a move of about 16 points of which we saw 13) area and from memory I think we hit the 1083 S&P low where we bounced up and found the next move as a surprise to the upside. That was the call and it was pretty close. All of that happened which leaves us for the next market move. I do see 1115 in the early portion of the morning session. It could come in the night trading but suspect there will be a move to this area after the open of Monday mornings session. Current closing price of the S&P on Friday was 1100.  That is likely only the start of more to come on the upside, but just my opinion not investment advise.

On Fridays trading, even though the turning points were very clear, if you don’t trade them right, or during the right time of day, one can’t expect to come out on top. I had woke up with bad back pain, something I live with now and then and I know it effected my judgment in Fridays session. The worst part was, that I started trading during the long slow New York lunch time of which lasted a long time. No significant movement as I note in the video. All the rest of the day was very good. I was set up in my mind looking for bigger moves which did not come. The market just went no where. I had one of those days where I saw my daily stop out point for the day looking at me, and just hung it up.

I could have tried to trade my way out, in the afternoon session of which were some very nice and predicable moves, but knew that I should not attempt it. I was in pain, and that can not and was good for my judgment. A daily loss limit of -4 S&P points is the maximum I will give up in one session. It happens, but not very often. It has been a long time since I had one of these, but like I said, I am human and still need to use good judgment when it comes to the time of day to trade and when not to trade if you are not feeling 100%.

That’s it for now, tomorrow will and should be a better day. Until then, Good Trading !

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