No personal trading for me, but the market did have a good day, posting some gains against some pretty stiff resistance.

If the market was going to go up, it now has a green light to do so. The momentum on the 120 minutes chart is still up, but more important, the daily has turned up for the first time since December 2nd. That is pretty important for the bulls.

The numbers on market sentiment came out yesterday and I would say it is good news for the bulls. With the market showing strength all week it could have influenced the bulls to get a bit excited, but it did not move. The current numbers are still 52% bullish and bearish at a 5+ year record low of 16.7% for now several weeks.

The bullish number is the more important number and at 52%, says that there is still room for a rally. With the daily just turning up, it is very possible that we could see a spike in prices. If it happens, I would say to be cautious into the rally. The bullish percent is going to give you a clue if we are going to run out of gas, so look for it.

Taking the two together, posted as bull/bear ratio, today we are matching a 5 year high as of today. Below is the link that I use to see the numbers that I am talking about. As mentioned it is two days delayed but it is still good information. If you subscribe I am sure on time delivery would be yours on Tuesday. The delayed is OK for me, I just use it as a reference to give me some insight as to the, “Pulse On Wall Street”. So here is the link, and by the way, I have no affiliation to the site;  http://www.market-harmonics.com/free-charts/sentiment/investors_intelligence.htm .

So, let me recap. Currently all of the momentum gauges that I look at when it comes to analyzing long-term direction is now pointing up. The monthly is up, the weekly is up, the daily is now up, the 120 minute chart is up. I can not say for sure that the market is going to go up on Monday, but the direction is pointing that way as of now. Just reading the current price action.

Below is something that may be helpful for planning and using your time effectively. Learning to trade can be time-consuming and things can get overlooked. The following can help you keep perspective and utilize the time you have to the fullest while still accomplishing your goals.

————————————————————-

Time Management

Factors To Include in Your Time Plan – There are some basic factors that all schedules need in order for them to be realistic and effective:

1. PRIORITIZE. Write down all your tasks. Sort them into three groups: 1’s, 2’s, and 3’s. The 1’s are essential: do them first. The lower level priorities can usually wait.
2. WORK TIME. Decide how much time the task requires, and how much energy. You may wish to include the task’s priority level to help make this decision.
3. RELAX. Regularly plan time to relax and get it together. This time may range in units of 10 minutes to whole days according to your needs. You’ve earned this time off.
4. EXERCISE. Exercise is essential for superior performance. Your brain would not function well if your body is tired. Stress reduces performance. Workout regularly.
5. FLEXIBILITY. Allow extra time for UnForeseen Obstacles (UFO’s) that are bound to arise. Something almost always comes up to derail your efforts. Allow for it.
6. FLOATING TASKS. Floating tasks can be done anywhere, anytime. Carry around a book that you need to read, some cards to review, or a letter that you need to write etc.

 Compromise – Sometimes drastic change isn’t necessary. Learning to compromise can make your life more effective. Try the following suggestions:

1. RE-PRIORITIZE. Change the importance of various tasks. Reconsider the number of hours of work you’re willing to spend per week, the number of hours you want with the family, and the number of hours for yourself and pursuing your trading goals.  Are you trying to do too much?
2. POSTPONE. Determine the priority of each activity or task and postpone lower level tasks.
3. DELEGATE. Get someone else to do it. If it is a task that is not essential for you to accomplish, then this may be an option. Don’t forget to respect other peoples time before pursuing this option.
4. SPEED UP. Sacrifice excellence for expediency. Get it done. Often, this may be your best option.

I hope this helps, when looking at the coming New Year approaching. Get a jump on things this week and be prepared for new beginnings. If you are organized in your personal affairs, you will have tilted the odds of success in your favor when pursuing ultimate goals and objectives.

Merry Christmas to all my readers,

Vince

Related posts:

1. Steps For Establishing your Trading Goals
2. Be Determined to Reach your Trading Goals this Year
3. Trading & Risk Management

Well, we were anticipating some pretty important market action today and so far so good. The Dow was up about 75 points today, but in order to slow down and turn this market around, we will have to see about 75 more Dow points to the upside. That is current overhead resistance and will need to break above that (9860) pretty decisively.

I think I said it all in yesterdays post, so I won’t repeat myself here again. We just need some time to see how this is going to play out and the above scenario lays out the other side of the equation.  Tomorrow, I will post a daily chart of the Dow and S&P to better show you what I have been saying.

Today, I took 3 trades starting around the New York afternoon session, 11 a.m. West Coast.  The first was a split trade and half came off at only 3 ticks, the second half was stopped out for -4 ticks. I was looking for the turn and just a touch early. So this trade gave me a net loss of  -1 tick on half the position,- $12.50.

The next trade, I did find the turn that I was looking for and picked up + 1 point on 2 contracts and let the other half run for +8.25 points. I was looking for prices to get a little higher but I did not push it, I got out at 1035.25 and I saw a potential high for the move at 1038. We came within 2 ticks of that trade high call at 1037.50 before the market retreated 6 points.

I re-entered long right at one of my “Turning Points” at 1033 and did not take half off early like I normally do but let the market take me to exactly where I thought it would, with the whole position. Once I was getting close to my target area, I took off half the position at +5.75 points of profit. I gave the other half some room to work, so it could make an attempt to hit the high side of 1040. It did not make it and I got stopped out at +4.25 points on the other half.

That was all quite OK.  I did notice that after I got stopped out, that the price did turn just after and move up to hit the 1040 level I had called. 

We were running out of time, but I did and still do see 1043 before the move is finished, but that will probably come in the night session or in tomorrow market. 

On that pull back, off the first good move, I was looking for prices to come down to 1031.75, which was 6 points off the previous high. Well, we came within 1 tick, 1031.50.

I make reference to all of this in the video’s I have posted below. These are live trading video’s of everything I just wrote above. The first three are tied to the first two orders and the last two are tied to the last trade.

I am not really saying how I come up with these trades on the video’s but I am reading price action. I do have a custom indicator that I have created that gives you these “Turning Points” and only risks 1 S&P point on the trade.  I do build my screens up with a few more tools to complement each style of trading I am in.

If I were to trade, this mornings session, there were good low risk turning points present there as well and would have easily gotten my daily goal, (2 to 4 points)  

Around 9 a.m. West Coast time, the market gave some traders a big gift, a 16 point sell off. I am sure I would have had some of that. I do see possibly getting out once and re-entering again short, but that was a fantastic move. Their were great add-on spots on the way, if you so chose to, but, what I am saying is these ”Turning Points”, happen all day, when the market is moving.

Yesterday was just incredible for my “Turning Point” signals. The market was definitely moving and if you knew where those low risk entry points where and positioned yourself in font of it, you would have done well. They were happening all day long, one after another, for huge moves.  My stops on the entries were still one point and the majority worked out for multiple point gainers.  

When the market is not moving much and price action is quite, I love to trade out of my T-1 scalp screen. Very accurate for short moves, averaging about 3/4 point each. I really only need a few of these to hit my daily goal and do just that, if the market is moving or not. Even in a slow chop zone, if you follow the method, it comes out. I will say, that the opposite is true as well. I am thinking and speaking to myself here. When I don’t follow my method and at times I don’t, just like everyone else, it does not usually work out and that is a good thing, believe it or not. I do not want to reinforce negative behavior and am glad the trades do not work when I go outside my method.

That is the exception, not the rule, because I do a pretty good job in following my method, plan and rules. The same will be true for anyone else who attempts to do the same.

These turning points are very easy to see and have only a few conditions attached to them before you can enter the trade, not to hard and very clear. I have all of this layed out in my 80 page manual and DVD video series. The price for my course is coming down as I have stated before. Any one interested to learn more, contact me at vinnie@sniperdaytrading.com

http://www.screencast.com/t/ZHl13cgkmDz2 

http://www.screencast.com/t/fUjVI35OFQQw 

http://www.screencast.com/t/JzGvvo6Ihy2

http://www.screencast.com/t/IZn8fKfNoM2 

http://www.screencast.com/t/9RC43BbNjSjh

Related posts:

1. Trading Lesson and Live Trade on S&P Futures Video
2. Called Live, Short Term Top In Today’s market.
3. Trading Environment, a key component

We have not had a day like this for a while, in that the price action was great. There was a real nice break just after the open and down we went. If you happened to be able to ride that wave down, you would have done great. The set up was there and down see went. It took all of about 25 minutes to drop 14 points straight down.  There was a nice tight consolidation just after the drop, usually the consolidation period would have taken longer before the next move.

The force of the drop, must have spooked a lot of traders to take on the short position, they thought it was the real thing and jumped on it. Well, it wasn’t at least not yet, in-fact it may not even come at all within this move? That is something all traders need to be aware of. Trading is not an exact science, but of probabilities and conditions.

What if statements, need to be asked all the time. What I mean by this is, “If this, then that”. If a break down or up at key pressure points takes place, then you can expect a move in that direction. The market is ruled by order placement. Order placement at key turning points. Your job is to find out where those pressure points are. An exact spot on the chart that is going to “Tip”, the movement in that direction. Once the momentum has shifted and we get to the tipping point, it usually does not take long for the price action to move out in that direction. The reason? STOPS. That is right, stops, SELL STOPS AND BUY STOPS. Those orders can be parked and act as fuel for a move in the opposite direction once hit.

As I stated earlier, usually a counter trend rally like we had today after the drop, will have run out of gas much sooner than it did. That can be a little clue that the move up may not be done yet. That is why you always have to look both ways. Seeing the case for a sell off is fine, but you have to know where the turning point is if that does not happen. With the daily close still in tack above support, I would have to be looking at a turn back up, just the same. Haven’t you always heard, “look both ways before you cross”, it still applies.

I have another daily chart up, showing a different possibility than the one I showed yesterday. With the market sentiment right in the middle of the range, there is more room for a run up before the numbers become extreme. Just an idea, we have to keep an open mind.

http://www.screencast.com/t/pfb41GqE              Next view of Daily Dow

http://www.screencast.com/t/bb0eVQDgeM     Just one trade today

Related posts:

1. Daily goal met 20 minutes today
2. Scalping the S&P 500 for Daily Profit
3. Daily chart of Dow Industrials with commentary

There is still room to the upside but it is getting squeezed by some strong overhead resistance on the daily chart. As time is moving forward, the momentum is slowing. The resistance overhead on the Dow has hit an upward sloping line eight times and each time it has been met with a move off of that area. This one is very clear on the daily chart. The bottoms have been rising at a faster pace but not by a whole lot. What is developing is called a rising wedge and this happens to be in a up-trend. Do you know what happens when you have a pattern like this? What is the next move when the pattern is broken? Well, the pattern is by no means broken yet, and from the looks of it, has a little more room to the upside, but not much. Looks like 10,000 will be a likely target for the upside, something I have been saying for a while.

The bottom of the rising wedge would put it at around 9300, but that would be if it just fell off a cliff and went straight down, not to likely, but that is where support comes in at the bottom of the pattern. It will likely bounce at least once off of that level once it gets there and it will get there, that is for sure. As time passes, the support level will rise, eventually choking off the low, until it is broken. The tops have found resistence at a slower or lower trajectory and what you get is a rising wedge.

When it is all said and done, the pattern will break and at that break, you can expect at the very best case scenario, a move back down to the middle of the march rally. The low on the Dow was around 6500 and let us assume that the high is going to be 10,000 so a move to around 7900 will bring it to a little more than a 50% retracement. That will be the best case scenario. That will take place when the lower support is broken and again that is currently as around 9300 and rising.

I did just see another rising wedge in the context of the bigger rising wedge that I have been just discussing. That is inside the upper leg of the current move we are now in. Is is getting squeezed and has bounced off of that level with yesterdays low of 9640. So that is the where we are right now. If this small rising wedge gets broken to the downside it is going to more than likely move over and or down to the lower rising wedge that I had been discussing above.  That is the major support for the whole move.

With all the talk, I will now have to post a chart of what I am saying so that you can see now with your eyes what I am saying in words. So check below the Dow chart and see the notes that I have made on it to see if any of that makes any sense to you, hopefully it does.

The bullish sentiment is down to 46% and that is 1% lower from last week. This is going in the right direction and allows for more room on the upside for the bulls if they can muster it. A reading of 55% is considered extreme and we are well off of that right now. It is interesting to see what will happen. I will leave the possibility open that the upper line that I discussed where the resistance was coming in at multiple times, that is that can get broken to the upside, then you may have a new pattern that could form and that would a parallel channel. The lower yellow line will become exactly parallel to the new location directly on top of the highest peak. We can look at that if and when the time comes. We have plenty on the plate to watch and see develope.

Thats it for now.

 http://www.screencast.com/t/WAe6CAPyqO               Daily chart of the Dow

Related posts:

1. Daily Chart of S&P 500, What Do You See !
2. Screen Shot, S&P 500 Cash Index with Commentary
3. Scalping the S&P 500 for Daily Profit

Yesterday’s action was no surprise, a big sell off. The indexes moved up on Wednesday a little more than I thought, but no real surprise there, just before a sell off, drawing in those who wanted higher prices. Wednesday I said that at the open we should see some continuation going higher by a few points, but once the trajectory of the up move is broken, you will see the wave down to lower prices. We needed to see how deep the sell off was going to be and if the market could support itself above the last pivot low and hold.

Well, we did just exactly that, but the sell off was already a little deeper which says we may be going lower on Monday. In addition, there was no bounce off the bottom and the market closed at its lows for the day, usually not a good sign. As of now the neckline has not been broken, but I would have to say that it does not look too good. The daily chart is definitely in a downtrend and has been for some time. The rally last week was a reactionary move back to the middle of the range and that is why I was looking for lower prices. The part that we didn’t know was by how much and how soon. Well, we are here now and to explain things a little further I put together a 5 minute video showing the price action and what we may expect over the next week or so, so check it out.

I have not been trading lately, my connection is still being restricted and I think I have two more weeks before I get my full bandwidth back. I will have to watch my screen time so that I do not go over my alloted usage of 5 gigs download and upload. The satellite venture was a failure, trying to get more speed into my system. I have heard there is another company that seems to do a better job, but I am a little worn out right now with the whole process.

This has been a good time for me to take a break anyway. I am not anxious about it, because I see the volume on the board has been very light. I hate that. It seems that the open is the only time worth trading, say the first hour. After that everything seems to have slowed down to a snail’s pace. That can work heavily against you, by testing your patience. You wait and wait and the market seems to do nothing and then, you put a trade on and it goes no where. That is not good. Even the afternoon trading is terrible. People are on vacation. It usually happens this way every year. So now is a good time for me to get things in order, rest up, and get my bandwidth and connection problems behinds me.

TRADING IDEA’S TO CONSIDER:  Anyone who is trading, now is a difficult time, so be careful. The market is not giving very many opportunities to get ahead and or recover for those underwater. You have to be much more selective and wait for the good trades.

Everyone who is currently trading, I believe you should be keeping a journal of your progress. Ask yourself before you take a trade, does this trade line up with my method and name out the key points. You should even make a check list and before entering a trade, or as you think a trade is developing, start marking off the characteristics of your method for taking the entry. Does this trade have this present, that present, and the other, what ever your entries call for. It only takes a few seconds and I think you should check it off as it comes together. This will keep you from getting clouded vision and reacting from emotion.

All of your training and practice will boil down to this: are you taking base trade setups? Meaning are you following your method or system. If you are not, it will be easy to identify where the problem is. That is why you need to have a daily loss limit, so that you have time to catch yourself before you bleed out. Every trader should do this. Yes, it takes time and effort to make up a sheet that has a check list on it. In fact, if the market conditions change and they so often do, you can have different sheets made up for different strategies. That way you have before you your map to follow. If you don’t have a tour guide, you will get lost in a foreign country, for sure. How will you know where to go?  But if you have a guide, you can easily follow your guide and or your map. This takes the stress away and frees you up to be on the lookout for your trades. Having all of your ideas only in your head adds more processes to compute and slows down the computer in your mind, but by writing it down and following a quick check list of things you are looking for, will free up valuable disk space for more meaningful insight into where do you go from here. Doesn’t that make sense? And if you follow it, it will make dollars too.

Have a great weekend and happy 4th of July

http://www.screencast.com/t/DF7nCk3Ye2 5 minute video of daily S&P and Dow

No related posts.

The Dow was down 122 points and the S&P was off by 15. We will likely continue the retracement over the next few days as the market posted a back to back weekly gain, something it has not done since May of 2008. I have a daily chart below of the Dow and S&P and you can see that after redrawing the outside line, which I was off by a little originally, it is now lined up straight and the market traded right up to it. It also happens to be the broken support of a few months ago. I mentioned it yesterday, but you can see it today in the chart below. Support when broken will then become resistance when tested. That is what we have seen the last 2 days. The Dow also lines up, the same way.

I had a good day trading today. It was slow going in the beginning. I started late, during the slow volume time of day, and could not get any traction. I was splitting my trades when I would have done better with, all contracts in, all contracts out. After a slight draw down and the passing of a little time, the volume came back and I got myself on the right side of the trend and started putting it together. My equity had very little draw down after that, almost straight up. I settled the day out with $+1629 dollars after commission costs and had over 20 entry trades.  Still traded small for the most part and have not yet made any changes, like I was talking about yesterday.

I have one small video of a trade I put on and a still shot of the trades just after that. I backed off on the size again at the end, which is really a good idea. If you have solid gains and you decide to keep trading, you have to have a point where you will lock in your profits for the day and give no more back, if you fall below that point. If you start to over trade and make mistakes, you can give back what you worked hard to get. That is the reason for backing off on size at the end of the day when you already have your daily goal and good profits. You will be a conservative trader with this approach.  This is about money management as well.

Do not let greed creep into your mind and find yourself shooting for the stars. More is fine when it is the appropriate time. I would say that if any one is just starting out and you do not have anyone helping you through the process, you should only be trading for a small daily target. I recommend about 2 points and not really any more than that.  The reason is, you do not have enough experience to deal with all of the changes the market will throw at you. Eventually you will get taken out. That is the hard cold facts.

We all like to think it won’t happen to us, but that is presumptuous on on our part. Being honest with yourself is the first step to victory and that victory can come in the form of two points a day. If you can pick that up, consider it a big victory and try and do it again tomorrow.  A common scenario is, you will pick up a few points and think it is easy, then let your guard down.  The market then gives you a read that you have not seen, or are not familiar with, and the gains are gone. You then say, “Iwill get that back,” and don’t exercise patience having already lost your focus, because you are thinking about the money and your losses increase.

You have to be able to stop yourself, if this is happening and walk away. Clear your mind and when you take your next trade, don’t be thinking about anything else, other than the process. Are you doing the right thing based on the method? Don’t be thinking about getting even with the markets. That has been called, REVENGE TRADING and it can do a lot of damage, not only to your account, but more importantly to your ability to have confidence in what you are doing.

By losing your focus and discipline, trading like this, you only join the ranks of so many others who thought they could. The battle is greatly in your mind. That is why I have some very good books on my web site to help you with the process. If you have not read any of them, I recommend that you do. Some of them are not even related to trading, but it sure does apply and can help with many other areas of your life as a bonus.

http://www.screencast.com/t/MHjVQ0SI8L              Today’s equity chart

http://www.screencast.com/t/qBfXqtoGBXq             Live trade video

http://www.screencast.com/t/ITUh0ylJ                      Still shot of some trades, end of the day             

http://www.screencast.com/t/M4FpJW2M8kx          Still shot of Daily S&P

Related posts:

1. Federal Reserve takes drastic step, Buys 300 Billion in Treasuries
2. Market continues sell off & Nice smooth day of gains
3. Day two / Sample Training

While Trading the S&P e-minis today, I called out the short term top in the market before it happened. You can hear me make the call before it happens exactly at the the high of the day. Then you can hear me make the call, on how we will be pulling back from that high point down to lower levels. At the close of the day, the S&P pulled back off of my short term target, by 20 points. That is a lot in two hours, with the Dow off 190 points.

This is going to lay the ground work for a continued pull back. I suspect that, at the open, we will get a small reactionary rally, but I would definitely be watching for short trades. We have had some technical damage and the path of least resistance should be to the downside.

With this being said, the market can do anything it wants at any time, there is no guarantees. All I can tell you is that when I see a pattern like the one I am looking at right now, a pull back is what usually follows. I will be watching for short trade setups and will stagger some of my exits. That does not mean all of them. I always watch price action to tell me what to do and that is what I will be doing.

I try to not have a strong bias for direction too far in advance, but it is something I will be looking at. It may be that the big sell off does not come until the afternoon session, or it could come early on. Price action is what will influence my decisions at that time. I only lay this out for you because I am looking at the daily chart, just like I am looking at a 5 minute chart or tick chart for that matter. The price action is the same and currently looks bearish.

The day was really pretty smooth. I had the time to trade, so I just kept at it. I started out with some nice gains and within a few minutes I had my daily goal. I cut my size back but kept on trading and added to earlier gains. I mostly traded small all day, 2’s and 3’s were the most common contract size. If I had some draw downs it was not going to eat into earlier gains with the small size. I did have some good runners today and captured some of them on video below, so be sure to take a look.

There are different ways to approach the trading market based on price action. If we are in a choppy market and you are trying to go for bigger moves, you are going to struggle. One way that I overcome some of that is to first identify what kind of market we are in. If its choppy, don’t even think about going for more than 4-6 ticks. You will have another trade in just a couple of minutes to capture additional profit. If in a trending market, you can set yourself up for a few more ticks, but you have to know how to play it and not get greedy.

Again, in today’s market, I had quit a few of these. If you have the time, take a look. If short on time, you can always come back later. The bottom line is that I try to get myself in a break even situation first, then a small gain, locked in. After that, if the market runs, it’s all gravy.  By only trading small, I was still able to post some nice gains because of the runners.

I closed out a long position that I got stuck with over the week end for a profit of several points. That gain did not count towards today’s numbers below. Today, I took 32 trades, 25 gainers and 7 losers and my total scaled out percentage was 77%. The total equity gain for the day was just a little under $2,500 dollars on mostly small size.

During a couple of the videos I am calling the intermediate term direction and as the next video progresses you can see it come to pass. We hit the short term top in the market today and pulled back 20 points, take a look.

http://www.screencast.com/t/oPiqTiFG6              Today’s equity chart

http://www.screencast.com/t/P9iiuTUPd              Some of  Today’s Live Trades

http://www.screencast.com/t/Bna8H6Oe              Some of  Today’s Live Trades

http://www.screencast.com/t/NAik15UUR           Some of  Today’s Live Trades

http://www.screencast.com/t/y7YeoTIZC            Some of  Today’s Live Trades

Related posts:

1. Live S&P Futures Trading Video’s Today
2. Short Term Momentum Turns Up for Market
3. Looking Like the Short Term Top Is In

I am going to have to hold my breath on that one. We have been down 14 out of the last 15 days. That is a big downer. But let’s have hope – where have we heard that before? I can’t help myself, it came right off the top. 

I have a chart of the Dow posted at the bottom. Take a look at the descending bottoms. It is currently hitting the third and last one right now. All I can tell you is that when I see a formation like that, you usually will get a move back up off the line.

There is no guarantee, and we will have to watch current price action to actually determine the trend at hand, but it is worth noting. If we do get a move up tomorrow, the more interesting thing is going to be how is the market going to go into the close. Most of the past rallies have been met with selling at the close, typical of a bear market. Could tomorrow be different? I think it could.

When people expect the market to sell off at the close of each trading day, it’s just such an event that eventually convinces the last holdouts to take a position short. We know what happens after that. The market reverses on you and it starts giving you draw downs. It waits until the last of them are in short and then you can get a pretty big short covering rally. That is, people who do the opposite of buy and sell first, (short), then hope to buy back at lower prices and replace the shares they borrowed. In the case of futures, there is someone on the other side of that trade who is betting against you. If he starts suffering draw-downs, he may quickly jump out and there is someone else to quickly take his place.

In any case, a lot of people are convinced we are going lower and I am one of them. But “not yet”. A famous line in the movie gladiator. Do any of you remember?

I think the market is ready to take some of the shorts money. It can then reset the trap and catch everyone later who has bought into the line, “this is the bottom”. What I am sure about is that it is going to take a while for us to put a bottom in, even if it is at these levels. We will not turn around until the monthly chart turns up. Right now, that is in pure free fall. It takes time for it to turn around and the path of least resistance is still currently down. But let’s give these downer guys a break and rally off the bottom, OK?  Like the market listens to me!  Well, maybe. Let’s see tomorrow what happens.

In today’s day trading, another good day. Only traded very light with a couple of exceptions, 1-3 contracts. I have been scaling out of more trades lately, but not all. I definitely have trades that are all in and then all out.

Think about this for a moment. If you had the means to do so, would you rather put on a trade with 25 contracts and hit two one point targets for a profit of $2,500 dollars in 20 minutes for the day, or trade 5 contracts all day and make the same money?  That is a good question and you may want to think about it before you answer right away.

If you are trading for the money, that’s OK, most people are. For a lot of people, it is an outlet, that’s OK too. The market is a lot of things for a lot people, but it is always good to think about what it is for you. For me, it represents time freedom and the money is nice too. With time, I have choices and so the story goes.

I am currently exercising some of my skills in scaling out of trades. I believe it is important to know how to handle different market conditions and to occasionally trade for what the market can comfortably give you. If I only have one set of tools in my bag, what will I do if I have to build a house? With that being said, “bread and butter” is always a good staple. That is where my short term scalping comes in. As I said before, I am OK taking 3 ticks on a trade, as long as I can do it with a high probability of success. This short term scalping is something I can usually count on getting, if things get tough. I only really need 3 trades of 3 ticks each to pick up 2 1/4 points. That would net me my daily goal after commission and to that I would say, “have a nice day”.

If you can pick up a net 2-3 points per day and do it again tomorrow and so on, how long do you think it will take before you will be able to trade 25 contracts? For some who are conservative, you can take a lot longer before you increase your trade size, by building up your account equity to a comfortable level that is right for you. But for others, it can come much faster. If you  can increase your size by one contract each week, you can get there in about 4 months. Trading for only 2 points a day, you are going to pick up $ 50,000 per month and that is if you leave your contract size at 25. After many months of doing that, you are going to be in real good shape.

I don’t want anyone who is following me to lose sight of that fact. We don’t need to take 20 trades a day and pick up 15 points. It is nice when you can and if you can, but it is not essential to making a lot of money. The increase in big money is going to come from DISCIPLINE and money management. You will always need discipline, that is for sure, but money management can take you to places you never thought you could go.

When I split a trade up and get the first targets, I always move up my stop. I am now in a no lose situation. You can do a lot when you are at that place. You may see a trade that can bring you back from a draw down by squeezing out 3-4 points instead of just one. If you don’t know how to do that and have not done it, then you are at a disadvantage from everyone else. It’s just another tool in my bag to help me and everyone else get their daily goal.

I took 23 trades with about 75 percent gains, trading very small. My daily total was $1600 plus, over 3 times daily goal. I have some video’s of the trades I took below.

http://www.screencast.com/t/gHqOoI3A              Daily chart of the Dow

http://www.screencast.com/t/cXwEpSROaiD      Daily equity chart

http://www.screencast.com/t/2l5t7TBflPl           Some of today’s live trades

http://www.screencast.com/t/09dWm1DOV      Some of today’s live trades

http://www.screencast.com/t/zjlfvsWFI              Some of today’a live trades

Related posts:

1. Sentiment numbers stronger than expected
2. S&P 500 bounces off double bottom & Trading Lesson
3. At last, an up day

We did not get a bounce, but a sell off today. I checked the exact number on the S&P bottom of November and  I see that the market went right down to it, at 742, and stopped. The Dow continued it’s slide falling 250 point to 7,114. I may have been a day early, but I still think we are in for a bounce.

The whole economic picture is pretty bleak. It has been said that the more the government does, the worse things get. I would agree with that, but that is just my opinion. Actually, I take that back. The facts would say that this is true – so far.

I do not want to be a downer to my readers, but I have been ”Bearish” on the market for some time, as many of you know. I have been hoping the slide takes a break and gives us all a little more time to get things together. But again, the market does not listen me.

A while back I had posted on the daily chart of the S&P that this market needed to stay above the 800 level – or else. Well, it is looking like the or else is happening. The daily chart has been in a solid downtrend since the purple line of support was broken on a daily basis. It has been confirmed by the indicator as well and nothing at this time has changed. The Monthly is down, the Weekly is down, the Daily is down and even the Hourly is down. It has been that way for the last 5 days now.  That is what I had to tell myself in looking at the slide today. Everything is down, don’t fight the trend.

Below is a chart of the S&P cash and my equity chart for the day. This is the start of week #4 and I have been posting my equity gains and losses every day.  I have not posted a losing day as of yet, and I don’t plan on it, but it could happen. My daily loss limit is two times my daily goal of 2 pts per day, so that would be a total of -4 points. If I am trading 5 contracts, then that would be 1,000 before commission. As I said yesterday, I came up to that point only one time and was able to turn it around for several times positive daily goal. Most of the trading days have been met with 2, 3, 4 times daily goal and up, so overall, I am pleased with my performance.

http://www.screencast.com/t/B7sIbT9SjS7                          Some of today’s trades

http://www.screencast.com/t/mQP1X38U7s                        Today’s equity chart

http://www.screencast.com/t/tOxsYylTb                               S&P Daily chart

Related posts:

1. Nice screen shot of 233 tick/ Thursday Feb, 19th
2. Sell Off Continues in the Stock Market
3. Called Live, Short Term Top In Today’s market.

I will go out on a limb here and give you my opinion on what tomorrow can potentially bring. A big move to the upside is what I am expecting to see in the daily chart. We went down like a rock to test the low end of the range (the purple line drawn on daily chart). It started in the night trading and when this morning’s open came, it dropped straight down, to catch up with the futures market. At that point it really did a good job in shaking out all the weak hands in the market and at that point the buyers came in to scoop up the deals.

With today closing near the high end of the range, the pattern is very bullish. The funny thing is, we also bounced down off of the upper outside trend line from above. When the market hit that today, it did just like it had done before and reversed its direction off of that high. It is getting sandwiched in between the two lines and something is going to give. Once it does, it will explode initially in the direction of the break. I have seen it a thousand times.

The question is which way will it break? I say it will be to the upside. What do you say? The pattern looks very strong to me, but again, I have said it many times before, you need to read currently what is happening and make your decisions based on that. So far, the big picture in the daily is still neutral, until we get that break out, in whatever direction. But you all know by now that I have a bullish leaning, in part because of the fact that very few people think the market is going to go up. It’s one little clue telling me that most people are generally wrong, even if they are considered experts. Actually all the more so.

Tomorrow is going to be a very interesting day, check the news. 

There are very few people who know how to read the market from a technical perspective and there are even fewer people who can do it with some degree of consistency. I rarely listen to any news during the day and a good reason is that today I did happen to hear that there was bad news on the economy – new information. I do not know what that was, but just heard that it was bad. Conventional wisdom will tell you that the market should go down and it did initially this morning, but it reversed in a very strong way, catching so many people off guard and forcing them to cover there short positions, which will push the market higher.

It’s not over yet. In fact, if the market can get a footing sometime tomorrow and make it into positive territory, there are going to be a lot of nervous people out there in bad positions going into the week end short. It could be painful for them and many do not have a great deal of tolerance for the stuff, so I would expect a fast big move catching a lot of people off guard, but not the readers of this blog.  We shall see.

Day trading was OK over all. I hit just a touch under 3 times my daily goal, but it was a rough start.  The early morning had good trading volume, that is what I like. The ability to move quickly in my direction giving me my points, a good thing.  I started as the market was slowing down, like the other day. I did not have the volume and direction early on that I like to see.  What can I expect, trading in the slow time of day is going to give slow or low volume. 

I still traded the split trades, taking two exits instead of one. This gives me the ability to move my second target up to capture a greater profit, but it shows that trade as being two trades instead of one. It does not really matter, but I am just explaining that the number of trades is half the amount posted. I took 25 trades in all and picked up a lot more than I needed to hit my daily goal and that is after commissions. I probably won’t be trading that much tomorrow, but its nice to know that I can continue to trade for more if I choose too.

After 11 am the volume came back into the market and the setups came with them. I pulled straight up once that happened. You have to take what the market gives you and it was not giving me much early on.  Knowing when it’s best to trade is important. The key times of the day are early morning and after 11 am. Some people break that down into a science and zooming in on specific time ranges within those high volume times. There can be something to it, but if you know how to trade, you just read the charts and follow.

I am still planning to have a training session on Saturday which can give you a chance to ask questions and get more information. The class is free for those interested and will start at 8 am West Coast time and continue to 9:30. Just give me an email message and I will be able to patch you into my trading screen. If you want to hear me, you will need to download SKYPE and need a headset if you want to ask questions. If not, you can still hear through your computer speakers.  Below are some of today’s trades.

Bye for now.

Vince

http://www.screencast.com/t/kAkWNuTYB           Some live trades taken

http://www.screencast.com/t/J0d93XOvrj           Today’s equity curve

http://www.screencast.com/t/Cbb7P2fBR              Daily S&P chart updated

Related posts:

1. Fed to lower interest rates tomorrow?
2. Today’s low needs to hold, so far so good
3. Very few bulls out there