Posts Tagged ‘bullish sentiment’

Red Alert, Large Stock Market Drop Approaching

Thursday, November 18th, 2010

This is Thursday, November 18th and all is not well on Wall Street.

Wow, I did not post yesterday, but their is a lot to talk about right now. I don’t know where to begin. I few days back I mentioned I could see where the stock market was going to go over the short term and I was right as I called it. We dropped 20 points exactly on the close and a few points lower intra day, which is exactly where I said that we were going in the next few days. The thing is, it all came in one day.

Then, I said, you will be surprised to see this area as being strong support and a staging area for a counter move back up. My members all got the specific’s and the reasons why all of this happened and the next likely moves played out ahead of time before the fact.

So, in today’s market, we saw just that. I did mention that we may hover at yesterdays lows for a day or two, but it will hold and move back up smartly. Today, we did just that, with a nice counter move to all the selling that took place over the past days. So, far so good. OK, now what.

Before I get to that, one more piece.  I called the market bottom at the end of August/beginning September, as I was very bullish, going against the crowd. The sentiment for a large drop then was very strong, but new that was not likely the way it was going to go. At that time the market was trading around the S&P 1040 and was calling for an extended run.  Once we got confirmation the up move was under way at S&P 1060 I was looking for S&P 1220 target and we hit a closing high of 1222 on November 5th.

I am not making that up, you  can go back and read my blog posts to see it is exactly as I write here today. In addition, virtually all the previous daily market moves were uncannily accurate as well. I don’t trade based off of daily charts, but the analysis of reading the market is the exact same as I apply it to my trading method. I know it may sound like I am tooting my horn and maybe in a small way I am, but my bigger point is, we have something brewing on Wall Street.

All of the past info is only relevant to point out, I do see what is happening and can see it ahead of time, before it actually happens. That is a great skill to have when applied to the intra day market action of which I do trade.

Now to the point, we are getting set up for a big market shift here very soon and it is now to the downside. The name of the game for long term money in 401k’s and IRA’s and such is, capital preservation. This is just my opinion and is and should not be considered investment advise. So, in my opinion, we will soon be looking at S&P 1140 and that may just be the start of something much bigger I am afraid. After a likely bounce off that area (1140), we will likely go to a touch above or around the S&P 11o0 area, where we would again, bounce up in a reaction rally. What the market does after that bounce, will be the moment of truth we will all be waiting on. The S&P 1100 area will be called the point of no return and again, in my opinion, that is what I think it could entail. I hope things will change when and if we get to the last area of support, but my fear is that it will give way to a  Market Mega Shift. This is what I had called for in late April over 18 months ago. If you go back and read my blogs postings in that area, you will see I was calling for the market to rally all of what it did predominantly.  My upside target back then was just a little lower in the S&P and can’t remember where exactly that was, but it was close to where we ended up.  I gave many updates to more closely zero in on specific moves as they were occurring, but again, the bigger point was a long extended rally to where we are today. It did take longer than I thought to complete, but that is to all of our benefit as the party was extended.

We just had a big shift in market sentiment and that can not be taken lightly. The current numbers, as I so often report are +8% to a reading of 56.2% Bullish. One interesting thing, this is a poll that is taken at the close of Tuesdays close and that day we saw the market drop like 20 S&P points, the same call I mentioned above in the short term daily charts. So, in the face of a 180 point drop in the Dow and -20 points on the S&P’s these people turned supper Bullish overnight. Before that, we saw over two months of tiny increases and flat readings, but only when the market is really ready to go down does this crowd get bullish. The group I am referring to is the Investment Newsletter people.

The top newsletter writers in the country sent out to their subscribers (the public), that they are very Bullish on the Stock Market as of now. More so than when the rally began and as such, that is likely to turn out to be bad advise.

I won’t rule out a rally back up to the old highs or there about, but as stated, this will only exacerbate the coming drop. Personally, I would like to see the market rally back up to form a double top or so, but the market does not listen to me, we have to listen to it.

Technically, we are at heavy resistance at 1200 and will just have to wait and see how this plays out. Many times at import market tops, bullish sentiment will push to extended periods of time only adding to the move once it turns. So, all I am saying is, be careful and don’t be taken by surprise. I hope I was able to help you see the other side of this market.

The risk to stay long in the daily and weekly charts for long term money is Very Very high.  Below is a chart of the Dow Jones Industrial in the 1930’s. I will point out where we could be in light of that chart and hope I am wrong about the rest of it.  As day traders, we can trade in any market environment, so in the months and years to come, master your skills so you can be and remain insulated to what ever happens on Wall Street.    Freedommmmmm !

Tags: , , ,
Posted in Market Call | No Comments »

Market on Course for higher prices

Saturday, October 9th, 2010

Today’s post is for Friday’s session October 8th, 2010 as the market continues to defy all logic and climb higher, +57 points on the Dow, +4 points on the S&P futures.

The market continued its climb higher as we moved into new high ground. Last week and before, I talked a lot of market direction and it was nice to see the expected resolve to the upside. It could have gone down, but their were far more things showing me higher prices. That was totally the unconventional market call, I know, but reading the current price action in what ever the time frame is possible. Having an understanding of market sentiment can help a lot if you also know how to interpret it. With that said, anyone following me for any length of time knows that I have been bullish for months now, from the very market bottom of 1040 and with a confirmation at 1060 on the S&P. That is 120 points from the bottom and 100 points from the confirmation point.

Calling for a market bottom and reversal up in late August was not a popular call and I remember feeling a little uneasy about it back then, but I had seen this scenario a hundred times if not more over the years in the daily and weekly charts. Taking the unpopular stand in not easy, but that is why most people loose money in the markets. As traders, we need to really think for ourselves and understand why we do what it is we do. It is in understanding our positions, where we come to really learn how to trade.

In the market sentiment numbers I follow, they moved up 2.3% this week to 45.6%. That is basically a neutral reading, but that does not mean that the market is going to stall. There is still room for it to gradually move higher and given its pattern of increasing sentiment a couple of percentage points per week, a continued move higher in prices and overall bullish sentiment is likely. I am looking for prices of S&P 1125 or higher in the weeks to come and the Dow, I see moving up to 11,700 or higher. We will just have to wait and see how it all turns out and how much higher if any we go, but that is the likely path of prices at this time.

A lot of people are calling for a market crash and that might come, but I don’t think it will just quite yet. I will let everyone know when that time will come, so stay turned if you care to know my opinion on market direction.

I missed a couple of days trading this week, Wednesday and Thursday, but was able to trade on Friday. I had a lot of preparation to do before what some are calling for, “a long hard winter” in the mountains of Northern California.

My trades from Friday are below which was a pretty good day. I had only one small loss on the last trade, but picked up some nice moves before that making for a nice day.

If anyone has questions please feel free to email. I will more than happy to answer and or help you where I can. If you want formal training we can do that too, but if you just need a little free advise, I am open to helping those that ask for it. If you have Skype that is the best way to talk and if it can be handled through email that will work too. My Skype name is “SniperDayTrading”.

So enjoy the weekend and get outside while you still can, before the bit of Winter sets in.  Good Trading to all, Vince

P.S.   My indicators are not the trading method. They are only a tiny reflection of what I can show you. Their is a complete trading methodology behind every move and one that can be duplicated time and time again. In fact you can trade the Sniper Day Trading method without any indicators at all and do well.  We teach how to read price action in what ever time frame you trade, but have a set of three main time frames we start out in depending on volume and volatility. This chart is the smallest one of the three but I have a unique way of integrating them all so it really becomes just one chart.

Tags: , , ,
Posted in market recap | No Comments »

Protecting Your Trading Equity

Sunday, June 13th, 2010

Today Sunday afternoon June 13th and this post is for Fridays market.

The market put in a nice day absorbing the previous days gains and that was good to see. The NASDAQ did the best at +1.12 % with the Dow and S&P coming up behind that. Everything is set for another big day. The NASDAQ market outperformed because it was lagging behind the other two, so now all three of the main index’s are about equal. Currently, the S&P futures are up about 6 points and it would appear in a position to try and take out the 1106 I had talked about for the last two weeks. A break of that will likely send us up substantially, S&P futures , 1122 to 1142 and or greater, as Fridays close was 1085.

Looking at  earlier triggers, I mentioned a break of 1073 will get this market moving up and so far we have had that. That move helped the NASDAQ market just get caught up and in line with the other index’s and still feel that the Dow and NASDAQ market will need to break up from Mondays open. From all indications, we will do that as the NASDAQ futures are up +9.50 point currently 5 pm West Coast Sunday. A lot can change from now until the tomorrows open, but a strong break from the open and holding onto those gains into the later part of the session will be viewed as very bullish and we will be likely on our way to the numbers I mentioned above. It is just to bad that we did not get under the bullish sentiment readings I was looking for. Close, but no cigar, Bullishness at 38%. I was looking for 35% or less to confirm a sustained move.

This breakout if it comes tomorrow, does not mean we won’t see a rally, it just means to me that it may not have full power and longevity behind it. Possibly, just enough to get to the 1122 to 1142 area, which is still a lot. Counting that in Dow Jones points, that would be 570 points if we get to the 1142 number and if you took it from my original long numbers of S&P futures 1073, that is 690 Dow Jones Industrial points if and when we see it.

I leave a small window open that we reverse this pre-market strength and trade off these numbers for a couple of days, but maintaining the trading range to help the sentiment get to its desired overly pessimistic position so that a real sentiment signal could be generated, one that will have bullish legs to it.

If I had it my way, I would elect for the later set-up and trade down for two days. The sentiment polls are taken weekly on the close of Tuesdays session and this again will give it a chance to trade powerfully to the upside if we see those numbers. The service is put out by a company called “Investors Intelligence” and I am able to get free delayed reading from “Market Harmonic’s”. They poll all the major news letter writers with there take on market direction and we look at those number and trade in the opposite direction of there calls. Actually, this is just a tool to give you overall direction and does not really help with the day trading decisions during the day that we face.

Above is an equity chart of Fridays session. I had two real large days early in the week and just traded small and for only about an hour on Friday. Being conservative at times is something every trader needs to gauge. I just know that traders suffer there largest and worst draw downs when they experience there largest gains. So, that is why I often trade smaller inside of a session as the day goes on and do the same inside a strong week.

It is easy to forget that you need to stay humble and never become arrogant or cocky, saying that this is easy and let your guard down in the process. This is my way of keeping my guard up and taking it one step at a time. Once you make the money from trading, that is your money. It is not the markets. It is never considered free money. You worked for it, by the many hours you put into your method or system. You need to guard it and trade accordingly to your plan. If you have a have light hearted approach to it, you will give it back and then some, trying then only to make yourself feel better by saying, “I am only down this much ( ? ) because the other was profits lost. Don’t think that way. In fact it is really better not to think about the money, but just be sure you are trading properly. Then it will not become an issue.

That is what we should do, but that is not what we do most often. We trade for profit and you need to consider and have safeguards against wildly re-entering in an area we feel is a turning point. Do not buck the trend unless you have very compelling evidence and know what you are doing. Never insist your will on the markets. That right there could save you thousands of dollars. If the trade is not “easy and obvious” as I like to say, stay away. Only trade what you know and when you have the “trading edge” and you will be far, far ahead.

I was going to talk about goals and goal setting as it pertains to day trading and or any kind of trading, but I got off on a tangent. Most often, I just start typing, and what ever comes to mind as I proceed down the page is what comes out. I hope some of it helped.

Good Trading and be back tomorrow with more.

Tags: , , , ,
Posted in Risk Management | No Comments »

Unemployment Numbers to be released Friday

Thursday, June 3rd, 2010

Today is Thursday and general market was up slightly with a strong finish into the close.

The S&P, Dow and NASDAQ markets were all up slightly at the close with a strong come back from earlier session losses. I believe there are unemployment numbers coming out tomorrow and it is expected to be an important figure which will propel the market big one way or another.

I did not hear the speech, but someone said that the President was speaking and made a comment about great unemployment results to come. He seemed to be upbeat about the news tomorrow. Well, let me remind you of a time that he addressed the markets before. It was two days before we hit the S&P 500 low of 666 on March 6th or 3/6.

The point is, two days before the market hit that bottom. I did hear a speech by the President that was so very upbeat and encouraging. He basically said, the stock market is a great buy, but not in those words. I had never remembered a previous president doing that, but it may have happened. Again, back to the point. Two days after that speech, the stock market shot up over 400 hundred points on the Dow and it has not looked back since.

Now, I had heard of a very upbeat speech that was given today about unemployment and that you can expect this and that. Well, he seems to have pretty good timing in the past, is he going to go two for two, maybe ?

The market is in a position to rally, but there is one thing I would have liked to have seen today that did not happen. I was hoping for lower numbers on the bullish sentiment that was released this week. It came in basically the same, around 39% bullish. That is not really good enough to get the call the I was looking for, but that does not mean we can not rally. Many times the numbers will push back and forth in the middle as a fight is taken place between the bulls and bears. Its just that when you get extremes, we often see bigger more predictable moves. OK, enough on that.

In today’s trading, I was trading very small, just 1-2 contracts. I was coming off a few days of very big gains and moved my contract size down to insulate myself. It did not change anything, as I still traded well and hit more than my daily goal. I probably traded for about 8 S&P points of total profit. Much more than the 2-4 points I shoot for on just a regular day.

There are times through out the week and month that I have been pushing it and I have done very well. I usually don’t like to trade for a long time. I know that it is often times best to get in and get out. If you have good profit for the day, book it. Go do something else or enjoy some of the freedom that trading offers you. Many traders will say, that they like the idea of being a trader, because it will afford them more time freedom. That can be true but only if you exercise it. Taking time away from the markets can give you a fresh perspective. If you trade all day, every day, you will get tired and burned out which can produce mistakes. You need to be fresh and on high alert. It is to easy to place trades out of boredom as the action slows down, so be careful of that.

As I say that, there is a place and time for study. It is important to get screen time in if you are new to trading. It has been said, that good trading is more like an art. That can be true, but you can learn this art or trading by exposing yourself to market data. I feel, every serious trader needs to keep learning and one way to do that is, by looking at past data and becoming exposed to different setups, reads, looks and situations. You can still do this while the markets are closed as you go over past data. There is a value to it, even if some think not.

Seeing how the market reacts in certain price action setups is important. You need to put your mind inside the price and feel the moves and try and experience what other traders may have been feeling for them to push the market up or down as you see it unfold. Again, this is past data and it does help. Looking now at live data is different, but if you remember what setups you seen that worked out before, you will over time, be able to identify them as live data unfolds or that is what you need to strive for. History repeats itself and that sure is true in the trading markets. Find the history of the past and apply it to the future. You will be glad you did as that is what will turn out a winning day, week, month and year.

Good Trading to all

Tags: , , ,
Posted in Market News | No Comments »

Stock Market Showing Weakness before Unemployment Numbers

Thursday, December 3rd, 2009

Today is Thursday, December 3rd and the markets are now starting to show its hand.

It seems pretty clear now, that the market is ready for a pull back. Over the next few days, I would expect the market to pull back to support, around 1077.  At that point, we will have to see, but the short-term momentum is down. I believe there is important unemployment numbers coming out tomorrow. I don’t know how or what that is going to do to the current momentum, but I would suspect that it isn’t going to change anything much, still down.

The daily charts on the Dow and S&P have been broadening, as I mentioned lately. It is getting strung out with a slight upwards bias, but that appears to be changing at least for now. Early in today’s session, we hit a new high in the index and backed off from there. We did close at the low of the day, which is really a bad sign. We will just wait and see how it plays out, but this is just what I am seeing.

On the sentiment front, I was waiting for the new numbers to come out and today they did. The bearish percent dropped again, by 1% to now 16%. That is low, very low. It has not been at that low of a level in the past 5 years or longer, I can only see the last 5 years. The bullish sentiment went down a little, from 50.6% to 50%.  We will just keep watching the bullish sentiment for changes.

With all that being said, the market can make its move down now if it wants to. You never want to place overly strict conditions on market flow. Reading the price action is the key and will always remain that way. Identifying sentiment conditions only gives occasional insight into major market moves, it is not full proof, but it has shown itself to be very accurate for the over 20 years I have been following it.

In todays trading I started trading again during the slow period of the day. That would not have been really to bad in and of itself, since that seems to be when I start most days, but I was feeling sick today. That was not fun. I should have taken the day off, but I didn’t. I hate getting the first trade of the day wrong, but that was how it went. I saw a move short that I was sure was going to pop, but I could not get into it fast enough and it threw my timing off. I did recover with a nice 7 tick trade a moment later, after that the market just stopped. It took forever to move a couple of ticks. I remember one small little momentum move took 30 minutes and it only moved a few ticks. I was dieing there, waiting through all of that and not feeling good to boot.

When I looked at all the real nice moves from the early morning trading I felt worse. If I would be trading the open, I would quickly have gotten my goal and could have ended it. When I feel better, I will be trading the early morning open, thats it. I have been trading OK, but it has been more work and taking longer because of when I start trading and am limiting myself because the moves are just not their.

The smart thing is to trade the open and take off the rest of the day, like everyone else. Enough about that.

I am going to have to end it here for today. Below is a video of my trades for the day.  

Tags: , , ,
Posted in Bear Market | No Comments »