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Bull Market Move Still on Course

Wednesday, November 3rd, 2010

Today is Wednesday, November 3rd and the bull market move is still on course with a new high breaking the 1193 S&P I had been calling for, closing at 1197.

The surprise was to the upside as I had been saying as the market closed above the important S&P number of 1193.  I know a lot of people thought we would go down, but it rarely ever happens the way most people think it will.

The Election is virtually over and the Federal Reserve did do the “Quantitative Easing” they had talked about. Their will be at least 600 Billion dollars used to buy up Treasury Notes over the next 12 months with another few hundred Billion as a back up if they need to. I can’t for life of me, see how anyone thinks this is a good thing. It is manipulation and sends the wrong message to the world. Various countries are now raising interest rates to keep inflation down, but the U.S. is pushing for a much higher inflation rate by doing this. Well, I won’t get into the argument and I am sure people can make anything sounds good if they want to try and prove a point, but I don’t think its a good thing. The markets will eventually agree, but, I guess not just yet.

A double dip recession is just around the corner in my opinion. I would love to see it pushed out as long as possible just like everyone else, but all the stimulus in the world is not going to fix the problems the country has. The Republican House now elected is not going to save us. Well, again, too deep a subject right now.

I do see higher prices in the index’s coming, mostly because no one else thinks they will. Support has been tested and retested and then tested again and it holds. We are up above the well established resistance now and all one can do is wait and see if we have follow through. Many times at a market top, you will see a spike to new highs and then a quick drop off. That is to get the weak hands to invest at the top so the strong hands have liquidity to get out. Big institutions take a long time to unwind positions. It can be weeks, before they get the market to absorb their inventory without spooking anyone in the process. So, we will see how much more this market has.

As of last week the market sentiment was sitting in total neutral ground, creating the possibility of more room before a market extreme is reached. I did a video a few days back on it and is posted in one of my recent blogs, pretty interesting I would say. Anyway, their is still a lot of pessimism floating around and that can mean more fuel to continue the advance. I was looking for S&P 1220 since the bottom of this leg and we are getting pretty close. Going back to the market sentiment, I will be able to see the release for tomorrows blog. Those numbers are out today, but I won’t be able to see them until tomorrow. A reading of 35% or less is very bullish, and a reading of 55% or more is considered very bearish. We were at 45% as of  last weeks reading and there for two weeks in a row, right in the middle. A increase for tomorrow and another next week if we continue to rally will be getting us closer to that top in the market everyone is trying to find.

In today’s trading I took 4 trades, all gains as the market was getting closer to come to life at 11 am West Coast. The afternoon session had a  punch to it as the Fed announcement came in around 11:15 am.  Trading on Fed Day can be hazardous to your wealth, but it can be done if you know how to handle yourself. All of my entries had no back wash to them. That is a new term I just made up, as I was thinking of how best to describe it, (LOL with my own self). Where prices don’t come back against you, is the best feeling, because you know you are hitting the hole, where demand is great. You have enough time to get in, get filled and prices give you and instant gratification, that is what I always shoot for, but you need volume and today we had it.

There is something to it, to be able to make it happen again and again. That does not happen by accident or by getting lucky. It happens by understanding how prices work in a synergistic fashion as well as a reflection of past data. The moves get reflected back onto the market as that expression.  I am able to see moves coming as data is building. It is something that can be taught and I teach it to those interested.

Tomorrow is again a new day, what ever happens, up / down and or sideways market I am confident I will be able to get at least a few points. Until then, I wish all my readers the very best in their pursuits. If you need help or just want a little advise on what you are doing, I am always available to try and help. You don’t have to be a student of mine to ask a few questions about your own trading and how it could be better. I don’t pressure anyone to sign up for this or that. That is not my style and I don’t need to do that anyway. That would defeat my purpose. I like to help traders where I can. I wont’ be able to reveal my trading method in full, but I can possibly help give you idea’s and redirect you to a clearer path. Good Trading to all,   Vince.

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New Highs for the Market again, market call on target!

Tuesday, October 12th, 2010

Today is Tuesday October 12th, 2010 and we are seeing higher prices with more to come as the market pulls an about face off of a premarket sell-off.

We saw a big reversal today with the market recovering all of the gap that we saw on the open and then some. I did have the gap clearly in my mind as the morning session was getting under way. I missed several good crystal clear trades after the open and started my day with a 1 point S&P futures loss. Came back just after with an OK entry for a three point gains, followed by a small scalp trade to finish the day. I did have a flat trade after that, but had to leave the room for a moment to long before I could take 1 point off, my original plan. I ended that trade flat as stated, but ended the day up for a modest daily goal.

Nothing to exiting there today, as I have been taking off early and have not had much screen time the past week. This will continue into the rest of this week as I have a few other things going on. I will try and get a few points before I take off but that is how my days are going right now. It will change back to having a bit more time to settle into the trading session and do some training video’s for my students, but I have to take one day at a time right now. Next week will be more settled for me. ( I guess out of default, I will be showing my trades for a while until I can come up with something else in a different time frame or something different, not decided)

It was nice to see that the market ended the day on high note. I know their is so much bad news out their that what is happening within the markets, does not seem to exactly reflect the current financial environment.

http://finance.yahoo.com/news/Foreclosure-freeze-could-apf-3924319053.html?x=0&sec=topStories&pos=9&asset=&ccode=

Their was a ton of fraud going on in the mortgage industry and it was not going to come out good for the home owner. Their can be a lot of finger pointing and blame to go around, on both sides, but the fact is, the mortgage industry has shut down basically all foreclosures on homes until they can get a handle on what is happening. This is bad news long term, but it is not so bad right now. This all plays into my theory of an expanding market until some event or catalyst kicks into gear. That will take the market down fast and furious, but just not yet. We are building into that as we speak, with the market moving into an area that will yet again captivate the public to invest again. They will not see what is coming as usual and get hurt again.

The market sentiment will give you the sign as to when this fleecing will be rip for the fraudsters to start the cycle all over again. Right now, they are drawing the public and any other, willing to buy into this rally. So, buyer beware is the story of the day. Their is likely more to go as I do see higher prices coming. I put out a few numbers last month and updated that last week and we are getting closer every day to hitting it. I will do a recap over the weekend on what I think and where we are in the cycle. This is all readable as I so often do, read the market. It can be done on  daily charts, hourly, minutes, or any other measure of movement, like tick charts, volume charts or range charts, all of which are pretty popular to traders.

So I will pick it up tomorrow and go from their.   Good Trading to all, from Vince

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Market Rally Feels & Looks Strong

Sunday, September 5th, 2010

This post is for Friday’s market September 3rd, 2010 as the market closes strong into the close and sits on major resistance.

That is how it is right now, as the market is sitting on big resistance in the 1100 area.  This is like a self fulfilling prophecy, as this was the likely target area we were to trade to from last weeks markets lows. This was clearly defined in my blog postings with a few warnings to help us keep our eyes open.

We have come all way up to this temporary resistance level and now what?  In Thursdays posting, I had said it would be natural and normal for us to trade back down for just a spell, until a likely breakout above the 1100 area gets taken out. I wrote that just before I saw the new readings on investor sentiment, with my alert at the bottom of the post. Given that development and the fact that the market closed strong into the close for a second day, I would have to give a bias to the breakout occurring right here from this level without the pull back. If that happens and it is looking likely, the next area of major resistance is about 400 Dow points higher and a bit more for the S&P to around 1160. It could be a few points more or less, but this area is where we will likely go to very quickly if the 1100 area is broken to the upside. I would have to give it about 80% likely it is going to happen from here. Either case, if we pull back to the middle of last weeks trading range, I still believe that we are going to see higher prices and that likelihood is +90%.

So, either way, I think we are going higher, which is good news for the bulls and those who want to try and get a better price on their equities. I don’t think we are in a long term hold here, but again, all of this is just my opinion and take it with a grain of salt, so to speak. Their is another level I do see as the next level of resistance and could then be the ultimate trade to level. This could take several months to complete and do believe we do have a pretty good chance for this to occur. For right now, I see it as the most reasonable and likely place for prices to travel and that would be, S&P 1245 or so. It could be a little higher, but this is just a touch light, just in case it comes up short.

Over the weekend I showed my students how I had come up with all of these price targets and projections as so many of them have been right in the past. They may not be right in the future but we can only base our price projections from where we are today and given the current trading environment.

I had showed how I came up with the short term top in the S&P in May of this year and how we were able to spot the March 2009 lows in the Dow exactly. There is nothing out there that is absolute, but we use what we have to give us the best possible projections and go with it until proven wrong.

That is how we are to look to the short term swings within  the trading day. Each day, the market gives us clues as to what it will do next. We need to be able to read the signs and clues and exploit those readings, thus giving us the advantage. We need to have the advantage or trading edge so when we put on the trade, it is not a gamble, but a very high percentage trade. If you don’t poses a consistent statistical advantage, placing a trade long or short then just becomes a gamble.

If a trader does not have a set established trading method that posses a statistical advantage, he is just gambling. That was a hard one for me to deal with at one time, as it brings into play many other moral aspects or trading at all. The only way around it, is to be one of the “investors”, (is a better word) who has done the hard work to bring him or herself to the point that they consistently are able to posses the trading advantage over the other traders who do not see what you see or have done the work.  Having a proven trading method that looks at all of these things is what is needed.

I am a firm believer that all traders need to learn and understand how and why the price moves, or better stated, price action. It is there that all of this comes together. Knowing and having a solid and often unconventional way of looking at support and resistance that is not obvious to the masses, is essential. With that, you will see things that you never knew existed and come to be able to trade any trading instrument in any time frame with a trading advantage.

I don’t often show much of any of this in my blog writings, but on occasion I do show just a little. The market posses a natural rhythm that we all need to be in tune with. Its all found in the price structure of each instrument. I remember a movie called “National Treasure” with Nicolas Cage. In that movie their were clues and signs that lead them and their pursers in the direction of the treasure. The things that were obvious were really of no value, but the unconventional idea’s or signs that kept them thinking and expanding their minds is what lead them to the treasure.

Trading successfully is similar to this. The answer is not always so easily seen. If it is, it will probably not be of very much value. So, we need to look beyond what knowledge you now may hold, to help unlock the secret of profitability. Do not forget we can often be our worst enemy from reaching our goals, so controlling things like greed is essential. That is a hard one for many of us, but we need to ask ourselves, what we want from the markets. To make a steady income or try and get rich as fast we as we can. This is a process that first starts with that question.  What do you say?

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Fridays trading below. I had an OK day, but I did struggle just a little as I got caught up in some slow chop, which caused a few small losses. This could have been avoided by trading the early open, which we saw some easy and obvious trades with good moves tied to them. I was getting a bit tired as the session carried on and did have a bit of indecision on a few trades but I snapped out of it and did pretty good overall. It wasn’t a perfect day, but that is how it turned out, the good the bad the ugly. That is trading. Enjoy the rest of the long weekend.

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Market to Climb the Wall of Worry

Thursday, July 22nd, 2010

This post is for Thursdays market and we saw a nice reversal from yesterdays move down, to better get ourselves in a position to move out and climb the wall of worry.

Yesterday I did say in a video I posted that we would see first 1080 and then 1085 just after the aftermarket trading opens up and that is exactly what we saw a high of the day when the market was 18 points lower or so with both of those targets hit to the tick. The natural flow of the market was for it to pull back yet again, to “create new pressure for the advance”. Well, that took care of the pull back and the new advance.

It would appear that we are ready for the market to continue on with this new rally that has just gotten under way now. A nice big trading day today with the Dow up 200 + and the S&P +23 and now more  expected to come.

I will have to cut my post off short today. I traveled to Portland Yesterday morning to visit my son and my wife and I are having a great time. Took a jet boat up the Columbia River for a full day excursion and it was great.

I will have limited postings for tomorrow, but will try and get my thoughts in for the weekend for sure with charts possibly showing how high we go from here. So look back over the weekend and I will try and have that updated.

Just before I left this morning for our outing, I did have enough time to trade, about 50 minutes and was able to take advantage of part of the move after the open. I came in following things just before 7 am and picked up around 8 S&P points, but did scale out along the way, still very nice and painless. Its nice to walk away knowing that you traded well.

Until my next posting, Good Trading to all.

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Stock Market Co-Operating with Bull Advance Call

Tuesday, July 20th, 2010

Today is Tuesday, July 20th and I got everything I ask for from the markets today.

Well, what a day. In the night trading, the market went on down to the 1050 mark and satisfied that minimum target area I called last week. I saw something in the charts yesterday that told me we were about to move out, but before we did, I nice target hit in the 1050 first. The market moved up nicely after the open and continued to push higher through out the session.

I made a U-Tube video of some of the turning points but elected to show it in a clear screen. You can see the trades I took through out the day and some of them were for good gainers to the long side.  I did take a few more trades after the video and they worked out nicely adding to previous gains. A very nice day over all, with nearly no losses. This is another one of those big $ days I talk about that we all need to hit on occasion. It does not have to be every day, because the market is not going to co-operate with what we want all the time, but when it does, take the easy and obvious trades it offers without struggle.

I did some scalping as well, locking in partial profits along the route. During the video, I mentioned that we were going to see 1080 on the S&P either late in the session or in tomorrow session. Well, right at the end of today’s session we hit the 1080 level 3 times and looks like we are going to close right on the high of the day.

If you look at yesterday’s blog title and article, you will see, I was expecting this move. In fact as of last week, I have been saying that we will likely move down for a few days to work off the current excess with likely targets at 1050 minimum and 1040 on the lower side but had a bias to the 1050 number, because the move back up was going to be explosive. That was the call. The extra time to prepare is a gift to those who can map out a strategy on how they can take advantage of the large Bull move that is still coming. We are just getting into position for this to play itself out in a big way.

There is likely going to be some catalyst for the move and I don’t have a clue what that will be, but it could be earnings surprises, since we are in earnings season? What ever it is, it does not matter. The surprise is going to be on the upside and it is going to get the bears running for cover in a very big way. That is the call and I am sticking to it.

I did say that confirmation will come in at 1090 to 1095, so we have not seen that. I don’t play the overnight, but like to follow and call the daily moves, because I know some of my readers do. In addition, it is a good exercise for me to get an early read on where prices are likely to go to, during the course of the day. Trading in that dominant direction is best for the larger moves throughout the day as in yesterdays 8 point short gain (partial) and some of today’s extended moves, (long).

We will likely see the 1085 I mentioned in my video, either in the aftermarket trading or early in tomorrow’s session. That is not the end of the road, but the market may pause there for a moment, to build up additional pressure for the coming advance over the levels I mentioned above.

Pretty bold calls, I know, but so far so good. Lets take it one day at a time and participate if your own work confirms my idea’s.  Good Luck and Good Trading, Vince.

P.S.  I started writing this blog before the market closed and just mentioned that we would likely see the 1085 target in the after market and I just looked to see that as the market reopened at 1:30 West Coast time, the market advanced 5 S&P points to exactly 1085. WOW. It backed off once it hit that number by 3.25 points, proving to me that the number was a good valid target hit. OK, that’s All Folks !!

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Market Sentiment Turns More Bullish – Trader Beware !

Friday, January 15th, 2010

Today is Thursday January 14th, and we have some new developments in sentiment to report.

As you know, I have watched the market sentiment numbers pretty closely and it has not given an extreme reading since the March lows. One side of the market is at an extreme reading now and has been there for several weeks now, but the most important numbers to watch is the bullish readings.

Currently, after having come off substantially the week before, the numbers came all the way back and then some. I am very confident that when these numbers reach an extreme, you had better hold on, because the volume and market volatility is going to come back and it will not likely be to the upside. We may still have some to go.

Currently the bullish numbers are at 53.4% up 5.1%.  That is a big move for one week. The bearish numbers are at 15.9%. This is a 9 year high, as best as I can see. It was not until back in 2001 that so few people were bearish. What do you think that is saying? Well, let me interpret. The majority is never right for very long, lets just leave it like that.

These numbers work in the opposite direction. Isn’t that strange? If you understand how Trading Price Action works, you would think it is really quite normal. The market takes you up, so that it can take you down and visa versa.

It is possible that we could see numbers as high as 60%. If we do, that is a super strong reading. Anything over 55% is considered the danger zone for a Major Turing Point and it could be coming soon.

We are in a Rising Wedge on the S&P 500 Index and if it gets broken, there is a statistical percentage that the market is going to go down with some significance. That is just how it is and how it works. We are in a pressure cooker, that is for sure and I can see it as plain as day. There are so many action points for traders when the market starts to roll over. Let me put it another way, we all know about the game of domino’s, right. OK, we keep setting up domino’s with each passing day and week and month go by. The longer this rally continues, the more painful it will be for those caught in the down draft to adjust themself and their portfolio.

I don’t have any answers, but, this is what I saw happening 9 months ago. We were going to trade back up to the middle of the range and at some point, the dam would break. We all had better stay clear of the path of the water and make preparations. If it does not happen, that is great, but I know of no other way to work off the excess optimism other than a decline.

We may have more to go to the upside  and that would be a good thing for others to get a better price as they prepare to sell into strength. OK, that is it for now on that. I was a little surprised that the numbers snapped back so strong. Wait and see for now.  

I will have to take a rain check on the post I mentioned about yesterday, Fear and Greed. It is a topic I will share my thoughts on in more detail. I will try to put it out in tomorrow’s post so it could make for interesting reading over the weekend.

Todays trading, was OK, but back to very slow trading. At 12 pm West Coast, there was just 1 million contracts traded. That was half of what Wednesdays volume was. There was some nice trades in the morning for anyone trading then, but mid day it got very boring and slow. I was still able to pick up my daily goal, without much trouble. I have a couple of video’s of the action below.

Until tomorrow, Good Trading !  

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Bullish Sentiment backs off- Room to Rally

Thursday, January 7th, 2010

Today is Thursday, January 7th and all is well on Wall Street.

I don’t look or watch much financial news, but I did see that the unemployment numbers are coming out tomorrow and there was some talk, good-bad-neutral. I did not really hear a consensus, but, based on some other numbers that I was waiting on, I would say that there is a good chance that we may have an upside surprise. I totally welcome it. It seems the sentiment numbers came out on Tuesday and just receiving them today, (2 day delay), says there is likely more room to the upside for the rally.

The numbers went the other way, a bit of a surprise, but just what we needed to keep the rally alive. We dropped down inside the 48 % Bullish figure (55%+ trigger point) and the bearish % came up 1.5% to a paltry 16.9%. The main numbers are the bullish numbers and they have pulled back down. That will give the market room to move up without causing an overly bullish bias. You want to see skepticism in a rising market. That is what really keeps it going. Once everyone feels to strongly one way or another, it’s usually lights out. So to recap, it does look like the rally will continue and the technical picture says the same thing as well.

The monthly, weekly, daily and 120 minute momentum on the S&P 500 cash, are all pointing up now and that should carry us over into tomorrows market.

Yesterday, I did mention that if 1130 on the S&P futures broke we could trade down to the 1120′ish level. It never made it that far and is a good thing. We were in a rising wedge pattern and in a up-trend, when that kind of pattern gets broken, you will usually see some type of selling movement at the break. We did get the selling, as the break happened, but it quickly got shored up. Later on, a test of that low successfully held and we were on our way back up to the highs for the day. That is exactly what you would like to see. The bear’s tried to take it down, but the bulls came in to shore it up and lead an advance to the high of the day. That is a good position, coming into tomorrows session.

I did not do any trading today, but I did post a video of the turning points in my “Scalp Trading” screen and you can see that below. These are short-term trades designed to capture small pieces of profit from the move. When I see a certain trade setup brewing that I like, I can click the screen to a different window set up, to take advantage of this condition, which can capture several points, instead of just a small scalp. Not all of these trades are gains, to be expected and I did not trade any of them today, in addition, you must know how to manage the trade after you put on an entry. All that said, these are still the turning points as the “Sniper Day Trading” method would give them. As of Monday, I will be back in full swing. I may take a few trades in Fridays session, but not sure, we will see.

I feel it is important to learn this type of trading, because you never know what the market will through at you and that would include, very slow, direction-less days with little movement to it. The market should  pick up considerably in volume, daily range and trade setups in tomorrows session and certainly Mondays. This is the time, that the institutional players will be coming back from there extended time off. It happens like this every year and so this is no exception.

That is it for now, a little tired and need some rest, so until tomorrow,

Good Trading !

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Black Friday Trading Could Be Very Black ?

Thursday, November 26th, 2009

Today is Thursday Thanksgiving day, November 26th and all is not well on Wall Street.

Maybe traders and investors had too much Turkey or maybe they will be feeling more like a Turkey after Black Fridays session to come. I believe it is going to be a half day of trading today, ending around 10 am West Coast time, but you should check to be sure.

Things were looking good this week, being that the days leading up to Thanksgiving are usually bullish for the market. This year proved that again, but what about the day after Thanksgiving. I don’t remember the stats on that one.

I just came off of the site where I get delayed readings by two days, gauging the market sentiment by the so-called experts. I will have to say, it is alarming.  It was looking good as I said and we will all find out soon, but the numbers have taken a big jump again for the better which in reality is for the worst. It has a reverse effect.

Last week I warned that the bearish sentiment dropped from 27% bearish down to only 21%, not very many. This week on Tuesday the numbers came out, but for me I can only see them on a two-day delayed basis.  Well, it dropped again, down to 17 and that is very-very bad. The amount or level of bearishness is so small, only 17% of the experts think the market is going down from here. I can tell you that is usually a screaming sell signal.  

This may be what the market was waiting for, to catch the majority off guard and feeling good about the Holidays with the trap being layed.  I checked the news and it seems like there is some credit problems in Dubai, (the middle east). The banking sector is not going to like it and it could be the trigger point to get this market on a sustained sell off.

From Wednesdays High, it looks like  the market has reached its high and is likely to decline down to 890 – 840 on the S&P over the coming weeks/months. I had wished I seen these numbers when they came out on Tuesday. It could have given me a little more time to warn everyone of the dangers.

If 1086 on the S&P Cash market gets taken out on a closing basis, it will set the stage for a continuation of the sell off. The market can not afford any big sell-off from here. Traders are going to use any excuse  to sell, now that we are in this short-term overbought area.

We are and have formed a rising wedge in a uptrend, when that gets broken, you usually get additional price movement in the direction of the break. Take a look at the video below.

One other note, I can not help but make a note on the price of Gold. Almost 1200 an ounce now. I follow the gold  market and did see the low in the market many years ago. I bought gold for myself at just under 300 an ounce and am holding on. I believe it is a reflection of the many problems to face as a nation going forward. I wish it was not so.

So keep your chin up and get some exercise after that big meal and keep your blood pumping, we are all going to need it in the days/weeks/months to come.

 

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Wall Street Rallies Catching Many by Surprise

Tuesday, November 17th, 2009

Today is Monday, November 16th and Wall Street rallies, catching many by surprise.

One day, a trend does not make, but it was nice to see the market keep its footing and start tossing out the bears. If we get another day like today, it could set off a  feeding frenzy . The Bulls will be goring their way through those Bears like nobody’s business, leaving a mess behind them.  

It has not really happened yet, but I only point out the possibilities. Last week, I just could sence it. Everyone thought we were going down. In fact, I am sure that they were surprised that we even made it back up to the higher levels by the end of the week.

Today’s close was very important and I was watching it. If we had a steep sell off at the close, that was not going to be good. It started to look like it was going to happen. Just after I picked up about 4 points for the session, the market stalled and went sideways. I finished trading, but I totally saw the break short late in the day. It started to look like it had legs, but it stopped right where it had to, to  mount a counter trend rally back up. It made half of the sell off back and we ran out of time. This is 50% back up off the little sell off, typically a continuation point for a sell off to continue.

The Dow was up 136 and the S&P +15 points at 1109. The S&P is about 10 points off from hitting its 50% retracement (1120) level from it’s all time high and the Dow has already done it.

Let me draw a line in the sand. This will help define things a little better. If the Dow and S&P break down below last Thursdays low, we are going to get some selling behind it. This is what the Bears want and the orders will really kick it to dump shares that were accumulated over the last months.

On the other hand, if we can contain the sell off and mount a rally similar to today, it is going to bring out all the Bears from their hiding place and they are going to have to cover their short positions only adding to the rally that already is under way. That is why I say, it could be a frenzy. If I had to pick one, I would have to pick the latter, I think a lot of people made up there minds about this market going down a long time ago. I was one of them, but I repented, from my ways and now see the light. The light I am talking about is that I need to remain open-minded about direction and not make my mind up before price action tells me too.  Although, this is what I said months ago, “I would have to see what is going on when we get there and combine that with market sentiment”.

One common mistake traders make all the time is that they try and pick tops and bottoms. It might be fun to try but if you are doing it with trading and investing capital, it usually does not work out for the majority.

It is best to let price action tell you what is happen and let the hero’s pick the tops and bottoms. We will not have far to trade-off the highs to see if in fact they are able to take it down. The last pivot low for the Dow is 10,171 and the S&P is 1085. With this market being only 25 points off that critical level, it pays to wait. Just the week before it was at 1029.

So, the trend it still up and I would say, we are smack dab up against resistance in all the index’s. If it closes higher from here, it is going to spark a big rally coming out of nowhere. At the same time we have to stay above the last pivot low as  just mentioned to keep the rally alive. A break of that level, could end it.

That is it. Now we wait. There is a lot of news coming out this week. This is a link that shows what is coming out and at what time. http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm  All traders should know these data releases. The news is not as important as the time of its release is, (my opinion). Don’t be caught off guard. Most of the news looks like it is coming out before the open, but Friday has a 7 am new release this week.

I believe everyone should always have a stop in place as they put on a position and that means the same second. If you don’t, it will only be a matter of time, that some event or unusual news release catches you or just  market action, takes you and your account down, sending you to the corner.

I will talk about this and other things next go around, until then,

Good Trading!

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Market Moves to New Highs !

Tuesday, October 13th, 2009

Today is Monday October 12th and the day was very slow and can be attributed to in being Columbus Day, a Holiday for many services, although the market was open.

The Dow pushed up to the high for the year or just equal to it. The same for the S&P, plus 4 points for the session. I think there is going to be a push higher, but the upside is going to be limited. Last week, I said what I thought was going to happen and so, we will have to wait and see.

The daily charts are to slow for me to trade off of. If it was my only trading time frame, I would die. I do not do well in holding on to positions for very long. It took me years to realize that the trading I not only enjoy, but am good at is the very short term stuff. That is usually the absolute opposite for most traders. When they shorten the time frame down, they start to lose control. In a longer time frame chart and trading model, you have much more time to react and analyze your trade. Your stop is always going to be higher as your time frame goes up.

That is one reason why I like the short stuff. My risk is very limited to 1 S&P point or less. I know some people would say, that is to small of a stop, how do you do that. Well, I do and am doing just fine with it. I have 3 models to trade from and they are dependent on market conditions. If you have short swings and limited trending action, you would do better to enter all of your position at once and exit it all for your fill. If the swings are longer and for multiple points, you would be better off holding on for longer point values.

Some like to use computer models for their trading and I can tell you, that I don’t think they are going to do as good as a human can. But it all depends on which human you are talking about. I can tell you now, that most traders are not going to make it at this and will end up in defeat. It is not that they do not want it bad enough, or try hard enough, but that they do not have the right mindset for coming out on top.

To be successful at short term trading, you will need two essential things. One is tangible and the other is intangible. First a solid plan on how to approach the market with clearly defined objectives. Many get caught up in ratio’s, I do not. I get caught up with getting my daily goal for the day. That is what is needed to be consistent. A steady modest point value each day. I hear a lot of traders and people in the industry say that is not possible. I beg to differ. It may be impossible for them, but not for everyone.

You need to be different from everyone else or you will get the same results as everyone else. So what is the second thing that is essential besides a trading method and plan. Well, it is the mental side of trading that so many forget about. Trading is emotional, in that it involves making decisions that have a direct effect on the individual’s pocket book, always difficult. That is what moves the market, the emotional decisions of others. Unless you are prepared to overcome the normal mind games that come with the territory, you will fail like most people do.

Trading is a net zero sum game. Yes, you are providing something to the market place by helping to create liquidity, but I am sure you would like to see some of that liquidity end up in your account. It will not happen unless you have an ability to see what you are doing and control your emotions. No revenge trading OK. Don’t try and get your losses back all in one trade. Making decisions like that are only the start to a downward spiral. Relax, stick to your plan. You need to be your own coach. Talk to yourself while you are trading and see what you are doing matches your trading plan and method. If it does not, do one of two things, STOP FOR THE DAY, or follow your plan and wait for the trades to come to you. Don’t go out looking for them. I have a saying, if I get in trouble, “TRADE BY EXCEPTION”. Don’t take a trade just because you think or feel you have to. Wait for the trade to come to you, most often you will be glad you did.

I at times get in to soon and only after see that I could have waited a moment or two more. Then the trade is just right in front of you to take and its a good one. The point to all of this is stay in control and be sure that you are doing the right thing. Sounds simple, but you would be surprised how many people change their plans once the trading day begins. Trade for a modest goal and stop for the day. Go do something else. Get outside, help someone else with what they are doing. We all need to have things that go beyond the trading ventures that we wish to pursue.

That is it for now, I had no idea I was going to carry on about this subject. It just comes to me as I start typing. Tomorrow, we will see what I continue with, until then, I wish you all a good day.

Tomorrow I will post the turning points or something else of value.

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