Today is January 3rd, 2011 and what a way to start off the year, with the Dow up 93 points and the S&P +12 to close at 1265.50.
Well, I would have to say I was wrong in my call for last weeks high as the high for this move in the daily markets. Today we did move out over that and closed above the 1260 number by 5 S&P points. This market is being very stubborn and does not yet want to go down. I have been looking into who is buying and pushing this market up and it seems to be individual companies with stock buy backs and foreign investment. Institutions have been selling on the way up in this bull run. The public has thought this market to be bullish and has remained that way since just before Thanksgiving. This is pretty much the longest run against market sentiment that I can remember in 20 years.
Some have suggested that the Fed has been buying up the market to help push it into a recovery area. As more people feel better about the stock market, they tend to spend more and feel better about tomorrow. There seems to be strong evidence of this, but I don’t think anyone could prove it outright. This could account for the over exuberance that this market has continued to show.
I can handle being wrong on this one, as a rising stock market is better for most people and few would argue how it got their? I could only be wrong for a day or I could be wrong on this one altogether if this market continues to rise, but we shall see.
Looking to the short term direction of the market, it is hard to get this wrong as we often get multiple chances to get it right in the course of a day. Below I have a U-Tube Video I did for today’s market with the low risk continuation area’s marked as well as the turning points of the day. I have not started up my trading for the new year, but plan to either late in the week of this coming Monday. The video below.
This is the smallest chart I usually use unless the volume is extremely slow, but I do use other larger charts to help see the bigger picture. The main goal for me is to capture between 2-4 points per session when I am trading. You don’t need to hit all of these signals to scalp trade your way to this small modest goal. Just one or two of them would do.
As I mention so often, the indicators are not the trading method, but it is consistent with it. This is the best of both worlds, because you have a reason planned out in advance as to when certain conditions exist, you will know exactly where to get in and out. I do like to sell into strength if I see what I am looking for, that gives me additional confidence to wait for the move to complete. When trading multiple contracts, I often times will lighten up and sell some into the first point or so, sometimes it is more, but it just depends on the price action.
Showing how these indicators line up with the action area’s is a good visual to help interested traders see that there is something to this. It also is nice to be able to lean on these indicators at times when the price action is not as clear as it could be, so again, it can help. Their is more on the charts that I can’t show, but some is better than non.
If anyone has questions or wants to know more, just send me an email and I will be more than happy to fill in the blanks with any questions you might have. This is a new year and a good time to start fresh. If you just have questions about trading and maybe your style or method, I may be able to give you some advise if you like. If you are interested in learning the full trading method, I am here to help with that too.
In any case, be diligent about your trading plans for the new year. Find what works for you and commit yourself to it. Find a way to overcome your trading errors. Being honest with yourself is a good place to start. That way, you will know how to adjust yourself. Identify what is holding you back and try and find solutions. There is a way, if you have the will to find it.
I wish everyone the very best with New Year, in all areas. Vince !
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Tags: Price Action, rising stock market, scalp trade, trading indicators, turning points
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