Well, we did see the up move in today’s action. Yesterday I did say that it could go either way and that is obvious, but the odds were that it makes the move up, was the call. We were on a tipping point, one way or another and it leaned up.

We did again have resistance at that 1080 level that was a problem a couple of days ago, well, we are back and knocking on the door. The market is in a good position to make its move right from here. I don’t have my charts up right now, it is  Thursday evening and the night trading may anticipate the move and try and get a jump on it. That is just what I remember from todays close, strong and at the high of the days range.

Speaking of ranges, we did come out of that inside day of pressure from yesterday. That is most often the case, when you get squeezed from both ends like yesterday.

I checked the Investor intelligence market survey of newsletter writers with this weeks numbers and yet again, the numbers drop. That makes it 5 weeks in a row and we stand at 34.1% Bullish. That is much better than it was 5 weeks ago. A reading of 35% or less is considered Bullish for the markets and you can expect a move up of some significance. I am a little surprise as I mentioned about this last week where we were at 38.9%. I had said that if the market sells of or stays underwater for a spell, until the survey is again taken on Tuesdays close, it may sway these guys to lose their bullish stand and lean to the bearish camp. Well, it worked and it made the numbers drop, like almost 5%, putting us in the bullish rally camp. Isn’t that something. Well, we didn’t have the big rally yet, but its a start.

Most of these writers are trend followers and by the time they get the feeling that the market is going to drop it already has. They become bearish, tell the world with there 10’s of thousands of newsletters, which sways public opinion to the short side, just at the moment the market decides to put the short squeeze on all the bears and make them run for cover. Happens every time.

That is how it works out in theory, but in reality, I have seen that happen as many times as I have had birthdays, that would be 47. Is this time any different? Probably not. I don’t like to base investment decisions on stuff like this, but it is something to consider when you put all of the pieces of the puzzle together.

We should rally enough to drive the excess off of the weak numbers and at least put us somewhere in the middle of the range, that would sentiment here. That should be the case in the S&P as well. With a reading like this, I would say, it is very possible for the market to rally all the way back up. That was not something I was actually looking for right now, but this does bring in the very possibility. The market will tell us, that is 100 % for sure. We just need to wait and see. Anyone with long-term short position, I only say, be careful as we all should.

In todays trading, it was quick and easy. I don’t like using that word. Thats when you can get blind sided. We always have to keep our guard up, drop it, think it is a walk in the park and the market will humble you quick. So, I reluctantly use that word today. I took a few trades, basically only had one market move. I had a touch of indecision but finally got it right. Going from memory, I think it was like this; flat, /-2 ticks, /+2 point, +4.25 pts, +3 points/ -2 tick small size,(1). 

I have a video of it below, but not to sure of the quality. I am trying out new software and not to familiar with it, so bear with me on that.

That is it for now, still under the weather, but hope to be better soon. Thanks for tuning in.

Good Trading !

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The market traded the way I thought it would today, in it going slightly lower to the 1085 area and then bouncing up. The first move would get the sellers to bite, placing their shorts positions and then the next move would be a short covering rally that would make them all cover their shorts and we would see a pretty good move up to around 1100.

You would not know, but I wrote all of this out last night and decided not to post it, but I erased it.  I felt pretty strongly that this was going to happen, but I chickened out, making as bold of a call as this. O’ Well. I guess I need a dose of courage, to post the next market moves. I had it spelled out as above with the rally coming in the afternoon session taking us up to the 1100 area. It is pretty cool, looking back now, that is what happened exactly.

Follow through long, is in order for tomorrows market. In-fact we could see upwards to 20 points  over the next couple of days in a reaction rally to the sell off.  It is possible. The hourly momentum is up, but the 120 minute chart is still down, as well as the daily.

All of that did me no good, because I did not take part in it. I should be back in my home office on Thursday night, ready for Fridays session.

I am trying to get my email back up as well as establishing all of my programs and files that were lost in my computer going down hard, like crash. I never had that happen to me before and I am not sure what caused it. I will be backing up things more regularly at this point. It is not a good feeling to lose your data and important files. ————————————————————————–

Here is the email that I was going to send out to an interested person in my trading program. I was able to recover it today. I just cut out the first paragraph because I covered that in yesterday’s post. Today’s post if a bit long, but that is what it took to answer the questions. ——————————-

In the event prices are jumping all over, we train ourselves to wait. If certain conditions are present, then we are able to act with some degree of confidence. If those conditions are not present, we wait. We should never feel compelled to take a trade just because we are ready to do so. We read the market. Back to your question, a trading method will be able to see changing conditions ahead of time and make the decision to wait, only trading when the best conditions of our method are met.

I have never been worried about what I use to ever stop working. That is why I trade the way I do. What happens on the screen is very predictable because people are very predictable. People are the same today and they will be the same tomorrow and the day after that. So, this has never been an issue. The way prices move on the screen is what we follow. We don’t follow indicators. I know I have shown a little on my blog, but that is because traders like to follow something that helps them see what the price is doing. Every turn or change of direction has a reason and is predictable to a certain percentage. That percentage is high enough to make a profit on a regular basis. The indicators only reflect what the price is doing and that is why the price is always first. I could never take a trade just because an indicator told me to go long or short. It only reflects what the price is doing, so I need to know why the indicator is giving me that signal and that is uncovered in a traders ability to read price action trading.

I have a chart of Apple 60 minute and Rimm Daily. I know you told me that you follow 60 minute charts mostly on stocks. My method works on any trading instrument. Corn, Oil, Soybeans, Gold, Stock, Forex, Index’s, All emini’s, (Russell, Dow, S&P, NASDAQ), in Monthly, Weekly, Daily, hourly, by the minute, by the tick. The reason for this is All of these trading instruments are traded by people and people are predictable as I have said. There buying and selling decisions are played out on the trading screens all across the world every day.

The Stock Market and all of these trading instruments I mentioned are “Fractal” in nature. Meaning they are the same and act the same, at every level of their existence, highest to smallest time frames. So, it does not matter if you trade hourly, daily, minute or tick charts.

Going back to the example I have included. The trading turns on the screen are not generated by indicators. They are generated by my trading method. When I put up the one of the indicators I use, the trading signals from the indicator match nearly perfect to the trading signals generated by my method. Which came first “The Chicken or the Egg”. The price comes first and that is how the trades need to be seen as.

In the beginning all traders will not see what it is that I see, but that is where I come in. I am there to teach them and show them what it is that is on the screen and why. When certain things happen, you can come to expect a result. That result is the trade moving out in your favor.

It is not rocket science and it is not a mystery. I am not and do not want to build it up to be some kind of magic or holy grail. It is simple in its basic form, but being still so simple, most traders are not aware of how things work and why prices do what they do.

It does take time to get better at seeing all the ins and out, but trading is never easy and it likely never will be. I just try and make it as simple as it can be. When I do that, I can take advantage of the setups.

Traders starting out or even traders with a couple of years under there belt, still need to exercise discretion. Trade by exception. Only take the trades that show all the best qualities of the method. Any trader trading my method, may need to trade for a little longer to hit there goal, 2-4 points, because you may want to be a bit more selective. You can’t go in as a gunslinger and expect to nail them, right away. It does take time. Everyone’s ability to see, learn and absorb is different. But what I teach is very clear, and understandable.

Commissions can definitely eat into your profit. If the market is not giving clear trading signals, patience needs to exercised. There is no two ways about it. I or anyone can not make the market give us anything. We can only take what it clearly gives us, nothing more. We need to wait for a good clear trading signal. If you are trading 10 contracts and you had 10 trades where you find that you have just broken even, in price, but have all the commission against you. You need to wait for a trade that will give you that back. Again, if it is not there, then take the very high percentage scalps or 3 or 4 ticks. If you get one trade that you average just 2 points on, trading 10 contracts, that is 10x$12.50= $125 per tick x 8 ticks = $1,000. Your first 10 trades cost you about $40 per trade or $400. Here you were able to cover all commissions in one trade and still net +560 after that. Even, one point will still cover you with a touch of profit. The key is focus on the trade and hit an attainable target and the commissions will cover themselves.

In addition, I always recommend anyone starting out to just trade 1 contract. If you can grasp the method and make it work for you, you will see the profit, in one or two weeks you can increase that to two and so on. Anyone trading, needs to get good at making the small contract size work first before ever going larger, in my opinion. If someone has a very large backing, I still think it is wise to trade with one. It will not be long, before you could be trading 10 and if you did it this way, you will have made a large sum already with some money that you will have taken out of the market, putting your at risk funds in a very comfortable position. If a trader is not able to do this while he is learning, you may need to check your trading motives and objectives. Are you trying to create a daily income or are you gambling and looking for action. It should be the first answer.

I think I covered your questions and tried to just be honest. I did not have to think to hard to write this or explain it and I might save it to help answer others who may have the same or similar questions.

Also, I did not write this out to try and convince you to come on board. I just found myself writing to explain how things work and here I am still writing. I know that what I use works and it always will. I have seen these core principles at work for many years. I was a struggling trader once, trying to put all of this together, but it does take time. Those who are determined to succeed are the ones who will make it. Not many traders across the globe are able to bring it together and maintain that. It does not stop the traders who have a passion for success.

I can not guarantee success to any trader, because each traders ability, understanding and decisions are different. What I have works very well for me and I don’t’ expect that to change any time soon. I can give you or any trader the tools and education he could use to build his empire, but I can not guarantee results. What I can do is that I will work with you or anyone so that you understand what to do, when to do it and why.

Good Trading, Vince   P.S. I will post the video’s on the stocks above as mentioned later tonight or tomorrow

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The major market index’s close near there lows for the day, not usually a good sign. We also put in another inside day from Fridays selloff. An inside day is when the market trades inside the previous days trading range. When that happens, we build up pressure and that pressure releases itself back onto the market, but which way? The current momentum is down on the daily and 120 minute charts very clearly, but are we going to bounce?

I did not trade today, I am traveling to the S.F. Bay area from my home in Norther Cal. I had a bit of misfortune with my computer today. It CRASHED. I lost a lot of stuff. I have some things backed up on an external hard drive, but not everything. It is very sad. I don’t have my email working through vinnie@sniperdaytrading.com . I have to reconfigure everything and I really don’t know how to it. It is going to take a little time. Anyone wishing to contact me, can do it still through Skype and leave a message under my screen name Sniper Day Trading or at an alternative email, vinnietarantino@yahoo.com .

I did see late last night an email message from an interested person in my Sniper Day Trading course and mentoring program and typed up a detailed response and saved it. I was going to send it off with a small video, more fully addressing his questions. To my surprise, it was all gone with the Crash, not “Trading Crash”, but computer crash. So, I will respond here, so I can give everyone the answers to the good questions that he asked.

The first question was, commenting on “Trading Systems”. He stated correctly that it is a fairly known fact that trading systems fail over time. There developers are always tweaking the settings to try to keep up with the changing market environment. What worked well for months, now is failing terribly. That is the nature of system trading. The question and concern was with the indicators that I use. What is going to stop the indicators that I use to stop working thus becoming ineffective.

My answer is; I do not have a trading system, but a trading method. There is a big difference. A trading method, allows for unseen things like yesterdays very choppy open. On gap days, as we had yesterday, the S&P moved up 6 or 7 points on the open and the Dow around 60-70 points almost immediately. It was catching up to the futures which had already gone up substantially in the night trading. Most often, the gap gets filled, but the choppy trading action can occur when you have the two pairing back up to each other. They are temporarily out of balance and until they get rejoined, you can have opposing forces at work. Well, a system is going to take the trades without regards to things like this, where a trading method, is going to give it time to get back in sync. Many times 30 minutes is a good cooling off period. In yesterday’s case, that indeed was true, where the market started to flow better and trading price action was pretty typical the rest of the day.

To continue, a trading method uses discretion, but has rules and certain conditions need  be met, before  initiating a trade. A system is just going to take the trade without regard to conditions. It is trying to remove trading emotion, which in many cases, does just the opposite. You end up putting your faith in something that you have no control over. Many traders abandon systems as draw downs eat away at their equity, which is where the added emotion comes back in. When do you throw in the towel or do you keep trading only to blow your account out, thinking that your trading system is going to make a come back. The whole thing is a big trading bummer for most.

In the above, you are not learning how to trade but putting your faith and trading future in the hands of a system that showed great results before only to leave you high and dry now.

That is no way to meet your trading goals and dreams. I will continue with this and other questions latter tonight or as soon as I can.

Until then, Good Trading to all !

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