Archive for the ‘market sentiment’ Category

Market Rally +400 on Dow Jones

Wednesday, November 30th, 2011

Today is Wednesday November 30th, 2011 and we saw the market rally +400 on Dow Jones, with the bulk of it coming in the night session.

That kind of a move is very nice to see, but it did leave most traders with little left to trade as the range began to narrow. Currently the market is still open with about 2 hours to go so there could be better action for those afternoon traders.

I did restart my trading today, with just very modest gains. I took 4 trades with three of them profitable. The second trade took care of the first trade with a little extra as I did add on and the next two added to that for as mentioned a modest gain for the day. Just a little over an hour on trading which is OK.  I really don’t like trading for multiple hours at a time. I am sure I could make more points if I hang in there, but I could make mistakes and have to struggle to come back and so on. I am sure many know what I am talking about.

When market conditions are favorable, that is when it could be OK to stretch it out a little. When the range is narrow and movement shallow, there is no need to push it. Early on after the open, things were much better, but after the first 90 minutes many are just finishing there day. That happened to be the top in the market and just when I started, a little more tricky. My trades and the first hours of the market action below.

Trading in the S&P emini’s can be simple, but it is rarely easy. Above are just a few small scalp trades that netted me a little better than 2 points. I look for 2-4 points per session and can go weeks at a time hitting that. Every trader needs a plan and a solid method to follow. I show a limited version of my screen as the indicators are just a reflection of price and my trading method. The price is always first and a traders ability to read it is key. These custom trading indicators are a nice way to tell you if you are early, late or should not even consider taking a trade. The color change is often a possible get ready indication that a turning point may be coming. Conditions need to be met for a strong buy at those area’s as some trades are better than others.

Yesterday, I mentioned I would go over the daily market and what we could expect in the weeks to come. I know Europe is on a tipping point and the market has corrected from its initial blast off from the market lows of early October, which leaves us coming back up towards overhead resistance. There is a little upside before that resistance firms up, which will be the ultimate test. Yesterday I wanted to write about this upside resistance being tested as we are doing today, but chose to skip it.

The market sentiment has pulled into a neutral area which does leave room for more upside in the weeks ahead. With last weeks large pull back, the sentiment continued to climb. With the market advancing the last couple of days, that lead me to think the bullish bias would continue, but it back off a bit instead. That leads me to believe that some skepticism did come back and will be what is needed for the market to overtake the overhead resistance we are approaching. Currently the market sentiment for the bulls is in a neutral area.  All very interesting stuff.

That’s it for now. Good trading to all.

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Alert- Significant Shift in Market Sentiment

Monday, April 11th, 2011

April 11th, 2011;   This last week, we saw a significant shift in market sentiment. That gauge has been out of favor for some time with the bulk of this last long rally in the daily charts. Things may be changing. Some had thought, myself included, that with all the Fed easing that was and is going on, much of that money found its way into the Stock Market. By rights, we likely should be trading at much lower levels, but all that aside, currently something has happened.

In October of 2007, just before that massive sell off, the public had grabbed on to the optimistic view that prices were going to continue higher, just as they turned down hard, fast and steep, taking many by surprise and whipping out huge amounts of wealth. That was when the housing crisis was just getting going and the start of that economic downturn. The Bull/Bear ratio then was 3.00  which was then the highest reading in years. The Ratio means there were three times as many bulls as there were Bears.

Currently the Bull/Bear ratio is at 3.65 to one and would have to be one of the highest readings I have ever seen. In addition, the percentage of market Bears on the Street is currently 15.7% and that is very low. The percentage of Bulls is in the danger zone of 57.3%.

I will add, we have seen high readings during this Bull Market move, but since the market is now hovering at these lofty levels and trying to consolidate as this shift has just happened this last week, we could be building ourselves some deep lines in the sand. Once those get crossed so to speak, the selling could ignite.

I am just pointing this out and it is not investment advise. Do your own due diligence. It is my own opinion that the market is in a dangerous area and vulnerable to a significant market pull back.

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In today’s trading, I did well, with 6 series of trades and 5 of them being profitable. The one that was not, I had lightened up on size and cut back to less than half and did get stopped out for three ticks only on just 1 contract. I came back with a little more to add to my gains and that was it. All my trade are below. Good Trading to all.

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Expecting Bullish Market Sentiment to Rise Further

Thursday, December 16th, 2010

Hello, Vince here on this Thursday December 16th as we saw some renewed interest in equities with the Dow +42 and the S&P  emini +6 points for the session.

Before I get started let me post my trades here below and will then give some commentary regarding the daily market.

Just before Thanks Giving the market sentiment turned extremely bearish usually signaling a change of direction. I called that out very loudly, but was looking for a closing break below the 11175 area to confirm the move, it never came.  A reversal back up was very likely to half the recent sell off and or a complete tracement  of the move back up to the highs, is exactly what I said back then.We have since moved past the old highs now with a new target in mind.

As the market moves higher, more investors are coming back into the market as the herd mentality is starting to take over. That does not usually last long, so be on guard. Their are some powder kegs brewing for a list of various excuses the market will use to sell off, when we finish this run. The maximum right now, is a little higher as time passes,  as high as 1255 to 1260. This is would be a retest of the initial resistance I called at lower levels around 1220, but the resistance is slanted up at an angle to account for the passage of time.

If anyone has not noticed, the Yields on 10 year Treasury Bonds as increased for 2.50% to 3.48% in one month. That is a 33% increase in 20 trading days and is a lot. This is exactly when the Fed was exercising Quantitative Easing, or buy back Treasury Bonds to keep interest rates down. Well, that does not seem to be working to well. In fact there are much larger forces now at work here and you can expect yields to move up much more, creating competition for stocks.

If anyone has not noticed, The Euro Dollar looks like its in big trouble. This is going to bring down country after country in Europe and more and more money is going to be needed to shore it up from collapsing. That is a big one. A financial Tsunami  brewing out there. Things may be OK for the rest of this year and maybe even early into the next, but those are just a few Mega problems brewing that can derail any recovery.

I would like to be optimistic, but being a realist is the smarter play. The point to all of that, Be Careful. Don’t become blind to the real economic situation across the country, lack of jobs being one of them.

Being a successful day trader can take a lot of pressure off an individual looking to find his place in the work place. I have received a lot of good emails recently sharing traders recent successes and thought I would share one of them here with you today. I believe this trader in the below email he sent me, will make it long term as a successful trader. With some personal coaching he is understanding the importance of keeping his mind clean and void of allusions of riches, all which will cloud and alter ones performance.  Taking it one day at time and trading only that which he understands from the method, he will make it.

This trader has a general knowledge of markets and has struggled finding something that works. After taking in all the information, he had great results in simulation having 7 days in a row of gains without one single loss. He shared with me in a previous email that he has never before been able to see the market the way he now does because of the trading method.

We had a personal training session together before he went live this week and he has done very well for himself. Giving the fact that Monday and Tuesday were very slow trading days, with Wednesday being a little more active. This is but one reason why I like to teach and share my method, to make a difference. This trader was considering on giving up the whole idea of making his dream a reality. It is early, as he indicates in the email, but he has never done this good before. I am very happy and proud of his progress as well as other students who have been able to put it all together. His email below:

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Hi Vince,

Today I took 5 trades: all Russell2k (TF), all 1 contract but the first
one

Long: +4 ticks – 2 C’s
Long: -4 ticks -  1 C
Long: +13 ticks – 1 C
Long: +9 ticks – 1 C
Short: +2 ticks – 1 C

Total: +24 ticks for today and +44 Gross for the week thus far.

I did make a couple of mistakes but was able to collect myself
and deal with the situation. Today was a beautiful market for day
trading many gyrations showed up. I keep studying and reviewing your work,
thanks a lot for the information and videos. Another thing I tried was to trade
stocks in my IRA, trying to apply the method and guess what happened?
…
I bought PIP as it crossed a reference point early on near the open and
collected a cool $150 IN NO TIME.

What can I say, I know it is early to sing victory but I am very happy
and very grateful our paths crossed. Your ideas really brought it altogether
for me. I know this is just the beginning and I need to learn more, I
will continue to do my part maintaining the focus and concentration.

Thanks, Gio.

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Much success to all my readers, Vince

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Inside Day Develops as Market Stalls

Monday, December 6th, 2010

Today is Monday, December 6th and we saw the market stall here at the top of the range with little to no movement.

The market took the day off as we saw very slow trading early on. It looked almost like a pre-holiday market from the first few opening hours. It did pick up later in the session as the S&P moved up to Fridays exact market high, but immediately sold off.  That would put today’s action into the “inside day category”. Today’s prices remained inside of Friday trading range.When you see a inside day, typically we see added volatility and movement once price moves out of that confined range. I would expect this case to be the same.

The Dow is currently sitting on support at 11,362 and the S&P is close to similar support with a few points to spare at 1220, which also happens to be today’s low. One interesting thing to note, with the market rally move last week, the Dow is lagging behind the S&P by about 75 Dow points. The S&P has made a legitimate double top and the Dow is as of yet to do that. It would need 75 more points to meet the same status. If that is going to occur, it would be safe to say that the S&P is likely to move out above its now established high of 1224 by around 7 S&P points. The question is, will the Dow make a double top or just come up short.

On another note, the market sentiment as described by “Investors Intelligence”, a survey of investment newsletter writers, has remained in the bullish camp now since its first posting on November 16th with the reading then being 56.2% bullish. The next two readings have been 55.7 and 55.4, all above the warning area (55%)  for a potential market reversal. When you have these readings stay in this signal area for extended periods of time, it only reinforces the coming reversal. The first signal from a few weeks ago was a wake up call that a shift is now brewing. I have seen this before where you don’t get the movement right away. This has always just allowed the public to bit a little harder and deeper on the long side before a reversal takes place.

Weeks past, I had mentioned as well as last week in a U Tube video that we would likely try and make an attempt at a double top or that it would be normal for that to happen. That was before the big run up and in fact that run up did happen. The line in the sand that was stated then and still now is a close below the 1175 area which never happened, but the reversal run up to the highs did.

So here we are near the yearly highs with the general public bullish to an established market extreme. I wont’ say that the market won’t push up a little higher from here, it is possible, but the next BIG MOVE is going to a surprise and it will be to the downside. If the market wanted to keep the same trajectory as it had over the last few months, it is conceivable we could see around 1245 on the S&P cash market. If we did get those numbers in the next week or so, that would be the perfect storm to catch the public at large. The market would trade right into overhead resistance and that could be the market highs for the foreseeable future. That is only twenty points or so and will be considered a minor move in relation to the move that is brewing short. The only way to work off the excess bullish sentiment is for the market to sell off and that will happen to the majorities surprise.

I got back to trading today and put on just a few scalp trades. My first trade was premature and anticipatory, not a good trade, but the ones after that were all OK. I did have one trade that should have been a gain, but instead was a three tick loss. That was my own fault as I had to walk away from the computer and did not get back in time. I did not have a target but only a stop in place. I am sure I would have had 1 point on that scalp move. Even though it was a loss, in my mind, it was still a good trade. I have all the trades I took today below.

My trading method is basically a scalp trading method, designed to capture 1,2 or 3 points generally. At times I will close out my trades for less and take less if the price action says so. Break even is not a bad trade as well, as I wait for next move.

The method is based on price action or the study of price. The trade indicators are only confirmation of what is already present within the trade method. I like to show the indicators I use above to give those who follow me some kind of an idea how one could time their entries even using these indicators. Knowing the method, you will see the trade coming and be ahead of any indicator signal generated, but again, it is nice to see a confirming signal for many traders. Their are other indicators I use as well, but these are the only ones I can show. I figure it is better to see some rational for the trades to those who look on than nothing. This is the smallest time frame of three that I use as the others are designed to work inside this small tick chart like a glove. I will pick it tomorrow, so until then,

Good Trading to all.

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Bullish Set-Up or Bear Trap

Tuesday, June 1st, 2010

Today is Tuesday, June 1st and the market sold off into the close and I got my wish.

We had a sell off into the close and ended the day at the lows, with the Dow off 112 points and the S&P futures off around 20 points. After yesterdays late post, we did go down again hitting the low estimates of the range I thought we might see. With the early target hit of 1080, that was good enough to minimally satisfy the pull back. As it turned out, we went a little lower than the low estimate of 1075 by about 5 points on the S&P futures. That was fine and all looks good for what I think may be coming.

After the open, the market was contained from going up, but did rally very nicely. We never got over the 1096 number that would send us higher as called and that was actually a good thing. This is just something that I see as a possibility and will remain open minded to it. With the market down today, the new sentiment poll will be taken after today’s close and it may sway the “Professional Newsletter Writers” to have a bearish bias. The trend for the last 4 weeks has been down and with last weeks poll, currently at 39 % we could see it get into the 35% area. It has dropped off from a high of 56% bullish just a few weeks ago. With the start of this week down, it may cause them to bit on a sell off scenario and push the bearish bias, which in turn will be bullish yet again.

I don’t know how they will react and I won’t know until Thursday evening as I do not pay for the real time service. I only watch and report it, because it is very interesting how accurate the opposite is so often true. This is only for the larger directional moves within the market. I would not be surprised to see a big up-day and move this week,  if in-fact the bearish trap was laid.

Just from a price action standpoint, if the market was going to make a run for it, we are in the area for it do so. It lines up with other things, making it a very possible move. From this point, it could move very big over the next few weeks, catching many by surprise yet again.

Keeping with the theme I was talking about in my previous post, traders need to look both ways. I will be looking for where the market will likely break down and break up big. That is also a very real possibility and cannot be ruled out. If you do rule it out, you won’t mentally be prepared to do what ever it is you may need to do, because your mind won’t allow you to take action against your strong directional bias. I often say, as traders we need to read the current action but see what the market is saying about each case, bullish and bearish. This is same for short term moves throughout the day. Build your case for bullish, but balance it against a move against you. which has more weight and how strong is the evidence. The strongest case, deserves the action and to what degree.

In today’s trading I had a good day. I was just trading small and picked up a few small scalp trades as the market was looking for direction. I saw a move short after we ran into some overhead resistance and initially came in a little early.

I did get stopped out, and I would have to say that this gave me a little  trading Fear attached to it. This is not the normal fear a trader will exhibit, but this was based on “trading fear of missing a move”. I have talked about that before, and it is something that needs to be monitored and controlled. If you feel strong about a particular move, and do not want to miss it, you have a tendency  to get in it to early. That can cause you to get stopped out and you may loose heart to re-enter thus truly missing the trade. There is a balance to the timing if you see a move coming. You still need discipline to hold yourself back and not take the trade until it is ready. Like baking a cake, if you pull it out early, it won’t rise and taste very good, but if you pull it out at the right time, everything comes together. (Funny example, but I just seen that happen in my home as my wife was baking one, L.O.L)

I did enter short on the trade and doubled up on it as well, because the evidence became very strong that a move down was imminent.  I would have like to have waited just a moment longer until all the evidence was in, but I did not and that is why I got stopped out. If you notice in the video, the indicator was spot on and I was not. That is why I do like using this tool. I don’t overly lean on it, but new traders could until they see and understand “price action structure” like they should.

That’s it for now, all traders need to find there trading edge and exploit it. What ever you do, try and be consistent. That way, once you find out what works for you, you will be able to do it again and again and that will take you where you want to go.     Good Trading to All !

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Market Drops Off as Sentiment goes with it

Thursday, May 13th, 2010

Today is Thursday, May13th and the market started to pull back after hitting overhead resistance.

Well, the market hit the overhead resistance I had talked about in the night trading. It came within a couple of points at 1175 before the sellers took advantage of the offering. I would bet you will have some holding on for big potential returns. If it does not happen, they may get stopped out for a 2-3 point loss, but if it does go down like I mentioned in yesterdays blog, it could be a big runner, potentially to 1120 area.

I saw overhead resistance at the previous break, it is not rocket science, but a pull back from that point would be a market play and I am sure there were many looking to get short after the open as well. There were a few good opportunities to do so, with one run producing a trade-able 13 S&P points.

I came into today late, at the last hour and missed all the fun. The market was in that big sell off when I started watching it. I did have a very nice trade just at the close of session for about 4.50 points.  It was that big counter trend move back up. Before that I had a couple of trades I would call bad trades. All losses are not bad trades, they are just losses and that is trading, but if I go against my rules and enter at a point that is not consistent with my method, I call that a bad trade. Even if a trade turned into a gain and I did enter properly, I would still call that a bad trade.

I was able to come back and then some, still hitting my daily goal, but I don’t like it coming so late in the day. You may not have enough time to recover if you are down. Well, that again is my fault for starting so late.

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Just a short word on the market sentiment numbers released on Wednesday morning. This is the investment newsletter writers weekly survey of bullish or bearish opinion. After hitting the tipping point on Wednesday morning the market watchers may have used that to sell it off. All the major Indexes were in the right position to sell off. They were on the right side of the chart as a top had been established with definable short entry points. The break that started on last Wednesday is exactly what we hit in the night trading from today’s session. It basically came all the way back up as if nothing had happened. The sentiment numbers being so bullish at 56% had something to do with it. At 55% and above, is typically the time when you will see a reversal.  With so many people thinking one way, that is a sign that it is about to go in the opposite direction. It lost no time as the decline really started on Wednesday and you now know the rest of the story.

Currently the numbers have dropped off to 47% and that is a good start. At 45%, that is considered neutral and 35% will usually trigger a bullish rally. If we see a pull back as mentioned, the numbers should come off again by next week. The newsletter writing community are usually trend followers and as the move becomes obvious to the majority, it then is time for a change in direction. We are not there yet and are still working off this overly bullish stance.

We will need more time for anything new to develop. You will usually see 3 to 5 good turning point signals from this tool per year. I will keep you posted and interpret as things progress.

That’s it for now, hope to see back again, for another session tomorrow.

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Market Sentiment Numbers Helped Take the Market Down

Friday, May 7th, 2010

Today is Friday May 7th and the market filled the gap down after its massive price reversal yesterday.

Just a comment, before I start. I had a very nice article I wrote in yesterdays post, but I see it never got uploaded. It was a good recap of all the action in yesterdays market and why I thought it dropped like it did. Discussed market sentiment and how it played a big role in the drop. I pains me to think the thousand word article is gone. Well, I can not begin to reconstruct it, but the only thing I will say now is, the Market Sentiment numbers did hit the trigger point of over 55% by getting to 56% as they were released on Wednesday morning before the market opened. That right there gave the institutions a good enough reason to take the opposite position as they often will do when a market extreme is reached. This extreme has called the last three big moves in the market just as of lately. The first top in the market for January, the bottom in the market in the first week of February and now the secondary top just earlier this week. All have been met with selling and or buying almost on Que as those number extremes have been met. I won’t carry on with it, but I had been warning and talking about just this thing for weeks now and my readers know that.

So, the market sentiment numbers did it again, calling larger market turns of 10% or greater. It is a good timing tool for the large directional changes that take place in the market. A simple little strategy for making money with this is to sell index options in the opposite direction of the current signals generated. As they will never get in the money because the price is moving in the opposite direction. If you sell deep out of the money calls at a turning point as the market is ready to drop, they will expire worthless for sure. When you add time decay to the factor, they will dry up faster than a grape lying in the hot sun. Just a passing thought for my readers. You can get the link for that sentiment survey service in the resource section of my website. I have been following this little know tool for about 25 years and I have seen it work like nothing else for calling large directional changes. They publish the numbers for free, but release it two days after the fact, Thursday night. Having the information on Wednesday morning would have made a world of difference. I don’t advocate to blindly follow those numbers, but it can give you insight into the current price action on the daily and weekly charts and can lend itself to your overall day trading strategy. There are about 3 to 5 good signals per year and it is very timely overall.

I posted a nice real time video of my trades yesterdays and I see it never made it up with the original article, so I will post it here again, for anyone who wants to watch it. After hearing myself on it, I notice myself saying WOW a lot, pretty funny, because the movement was off the hook. Anyway, the first video is from yesterday and the second one is from today. Both are profitable with yesterday having several trades all gains, I did have only one small loss for 6 ticks on small size, the others were much bigger with one trade good for 12 S&P points. This is yesterdays video below.

The second video is from today, in which I only took one trade for about a 6 point average profit. I scaled out of three contracts mostly all in the same area and that was it for me. I have moved my stop to 6 ticks to adjust for the larger volatility but in this trade I did not need it. I did enter a touch early as far as the indicator I have up on the screen, but I don’t really follow the indicators like a text book. I trade the price and the indicators at times tells me, if it agrees or not. I would be well served as well as anyone else who would just follow the indicators I have up on the screen, but it is not the best way to trade the markets. You need to understand “Why” the indicators are saying buy or sell. That will help you to better understand what and why you are doing what you do, if that makes any sense.

Many times the indicators can help you see what you can not “Yet” see with your eyes what you should or could see in the future. With time, you will be able to see the same thing and that is what you want to achieve. With all that said, trading the indicators can help in the beginning and it can be a general road map to help you with timing. Lets face it, trading is all about “When” to pull the trigger and then managing the trade after that. I have other tools and indicators that help with that, that I do not show. This is really all I can show to let you see, that there is a reason to go long or short. Often, trading programs are difficult to understand and it becomes hard to know when to buy or sell. This is one of the reasons I am trying to show my readers when to go long or short. Again, I am not saying what the indicators are up on the screen, but it is a fraction of the total and it is only a glimpse of what is possible.

You still need to know how to trade and handle the pressure of putting on a position. Having good timing tools can help increase your confidence, but the rest of the process is then knowing and learning why you will go long or short and which trades are better than others. When watching the video below, you only need one or two trades to make a good day. I only took one trade late in the day, that was plenty. The market is not usually this busy, but the process and the signals are the same. This works great with stocks, ETF’s as well as commodities and of course E-Mini Futures. So take a look and if you have questions don’t hesitate to ask.     Have a great Weekend.

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Fibonacci Level’s holding at 62%

Monday, May 3rd, 2010

Hello everyone, today is Monday May 3rd and the market has been moving.

We saw a very nice rally today on Wall Street with the index’s moving back up off there recent lows from last week. I think today’s rally surprised a lot of traders. They may have been thinking another big down day, following through from last weeks wipe out. The market rarely does what the majority expects it too.

I traded very little last week, as I made my way to the S.F. Bay area to visit family and friend amongst other things. I made up for any lost opportunities with Fridays and Today’s gains. I had a real smooth day on Friday with all gains. Took 5 trades with two scaled out trades. The market was moving pretty big on Friday and caught some nice moves. Today was the same, mostly all gains, 9 trades, eight profitable and I did catch the big move that took traders by surprise.

I have a equity chart of Fridays session below and today’s trades below as they were taken. I took a couple of counter trend trades in my scalp screen today, so it may not match up exactly with trade indicators, but most of them do as I was trading out of my T-2 screen as well. In addition, I don’t trade the indicators, I trade the price and the indicator follows.

If I think the market is going to be contained or choppy, I will trade for only small moves, 2,3,4,5 ticks or what ever I think I can get, but small bursts of movements. My risk is also contained to averaging a one to one ratio or better. If the market is not going my way and struggles or I feel I have lost the edge and or momentum, I will get out with a break even or small loss, one or two ticks, while I am trading with a safety net of 1 point or 4 ticks. If I am targeting 3 or 4 ticks on the S&P, which is 12.50 per tick x the number of contracts traded, 5, than each tick is $62.50 and it takes 4 ticks to make up one S&P point, so 4 ticks is equal to $250 dollars.   One point can be had in minutes or less.

Key area’s to watch are Fridays session lows and also Fridays session highs on the S&P futures, 1207 and 1182.  I feel that both of those numbers are very important to watch and should tell us more about the markets real intentions. We are in very tricky spot right here. The market looks like it is on the right side of the chart and that is why I am sure a lot of traders were thinking after a slight retracement of Fridays sell-off that the move would resume short. So, this market could be setting itself up for a pump and dump action for Wednesdays session or there could be some additional juice left in the glass for this market to move on. We are still at this 62% market retracement and the longer the market hangs out in this area, the bigger the move.

Its to bad, I wont see the new sentiment numbers on Wednesday morning as they are released. I wait until Thursday night and get the delayed readings. A lot could happen in Wednesday and Thursdays session, but I will be watching both of those numbers especially the lower one. If 1182 gets broken and soon there after another key number traders will be watching is 1177, I can only see lower prices from that point. Until then, it looks OK, but extreme caution is in order right now.

With today’s big move, I believe it will spur only additional optimism as that has been the trend over the last weeks. A rising level of exuberance is being displayed and more and more investors and traders too are feeling better about this market. That is when you need to be careful and at least be aware of the opposite taking place. That way you won’t get caught up in the excitement of a rising market. Last week we had some big sell-offs and even in the face of that sell off, the sentiment went slightly higher. If tomorrow session stays in the upper end of today’s trading range, that is going to have an effect on the professional news letter writers that forecast there opinions on Wednesdays market open.

We could see a spike to over 55% mark which is traditionally the trigger point for a market reversal. Currently we are at 53% and change and in position for this setup. So, you can’t say you didn’t know if it hits. The significance of the market making it all the way back up to this upper end retracement level is high, meaning highly significant. This too is a key area that traders look at and could in-fact be that Fibonacci retracement trigger point as we break the two numbers I mentioned above. Fibonacci numbers are nature rhythmic area’s that the market likes to move into as it makes it way onto higher and lower destinations. I can speak more of this another day soon.

I see the volatility increasing and that is a good thing for traders. When you see large market swings, that is a time to let your profits run. I teach and talk a lot about scalp trading, because that is what I do, but when you see market moves for extended points like on Friday and even today, I feel traders should have in there bag the ability to take advantage of that. You don’t have to trade that way every day, but if you train yourself to catch the large moves when they are happening  it can make up a lot of ground in a hurry for days you may not have traded and or making up for past losses.

The thing is don’t be enamored with the big moves all the time, it will cloud your judgment on other trades. The market only trends about 30% of the time with the other 70% confined to trading ranges etc. Keep that in mind and be careful, but do not trade in fear.

Good Trading to all.

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Market Sentiment

Thursday, April 8th, 2010

Today is Thursday, April 8th and the market is showing some nice resilience in maintaining its  composure.

Well, I will get right into it with the market sentiment from Investors Intelligence. We saw basically no change, actually up .05 %. A slight move, but I would call it flat and an amazing development for the bulls. Getting this info hot off the press two days ago, could have given additional insight. That is how I would see it.

With the numbers, approaching extremes, but still far enough away to allow a significant amount of movement on the upside,  are leaving room for additional advances if the market co-operates.

A reading of 55% + is considered a market extreme and very often signifies market tops. Currently we are at 48.9%, with the last three weeks stuck in the 48% area.

This is not the point where we usually will see a significant market top. There is still enough skepticism alive for additional movement at this point. I will keep my eyes open for the possibilities, its up to you if you decide the same.

I always look both ways, but all I am saying for the daily and weekly movement, it appears the upside may still be alive.

Today’s action was very nice.  A good trending day with limited volatility and plenty of low risk  buying opportunities along the way.

No trading for me today and its unlikely I will trade tomorrow. That’s not a problem, I had a pretty good day yesterday. Its not really enough to cover my goals for the week, but I need the time off and I am traveling with my wife this week.

Short post today, but we will be picking it back up with new insight and trading idea’s for my loyal readers, so hope to see everyone back soon.

Good Trading, Vince

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