Posts Tagged ‘federal reserve’

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Price Rejection off of 1193, second attempt on Election day?

Monday, November 1st, 2010

Today is Monday, November 1st and the market made a nice attempt at the 1193 area, hitting 1092.75 before price rejection kicked in.

Yesterday, I wrote that I felt we would soon break and close above 1193. Well, today we hit 1192.75, one tick shy before we started to fall back. Today we had another large gap opening and today was no exception on getting the gap filled as the opening gap was again filled a little later in the session. Amazing. The charts are still in tact and we will likely make another attempt at the 1193 area tomorrow. Will we break and hold, we will have to see, but I still do think their is a good chance.

Tomorrow, their are two events that will have a big impact on the days and weeks to come. The first one is a Federal Reserve meeting which will be discussing how the Federal Reserve will handle “Quantitative Easing” going forward.  A fancy term for how the gov will work the system to help things keep rolling along, or break it. The outcome has yet to be determined, but what they have done up to this point has not helped a whole lot, but likely just keep things afloat.

The Fed is the buyer of last resort as far as Government Bonds are concerned. If no one is there to bid at the current low interest rate, the Fed will come in and buy up those bonds. Question? Where is the Fed getting the money from?  Well, the only answer is, create it, out of thin air. How this helps, is that it keeps interests rates artificially low. That keeps the Governments costs down when paying out on those Bonds. Decades ago, I was following this national debt issue and I knew that this day would come, when the demand for government bonds fades, they themselves will hold up the demand by buying these I.O.U’s

It has been said that their has been 1.7 trillion dollars injected so far this last year and tomorrow they will be talking about allocating another 500 billion to 1 trillion more. Those are scary numbers. It will help in the short run if a large number is settled upon, but this is not good news overall long-term. So, look for what comes out of the Fed. I believe they are meeting tomorrow but don’t know when any information will be released?

The next event is the Election. That should be a barn burner, meaning, it is sure to stir things up.  A possible shift in political power is always a big deal, so look for the markets to get heated up as far as volatility.

Lines in the sand to remember.  The S&P should stay above the 1167-1170 area on a closing basis. The Dow should stay above 11,020 before a possible break down of this move could come into play. It is always important to know where things will change no matter how sure you think a move will come. If you don’t map out the possible reverse of what you think, you will not see the reverse of what you think. You will only see the market through your one sided view and that can be devastating. Don’t do that. Look at both sides just in case you are wrong. This goes for your short term trades in the Emini’s as well. You don’t have to reverse your position if you think you are wrong, but knowing exactly where you will get out if wrong is an absolute must.

The market is extended and a sell off is surely on the ticket for many, but the market needs to show itself first before that can be confirmed, until then, the trend is still up.

In today’s trading, I just closed out my extended week-end hold, just a little after today’s open, as the market was moving closer to that 1193 area. With the gap again today, I had to leave open and accept that we may just move up to the resistance area and then work on filling the gap. That is exactly what it did and I did play just right, selling into early strength along the way. A chart showing the closing positions from today below. Good Trading, Vince

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Federal Reserve Interest Rate Decision 6-23-10

Tuesday, June 22nd, 2010

Today is Tuesday, June 22nd and the market is acting right in line with my previous reversal call.

On Sunday afternoon, my post that day called for a reversal once the target area was reached as it was in Mondays market, exactly as called. In that Sunday post, I said that we were going to the target area and would see a reversal day with the next move back down to the 1080 area at a minimum. It could go farther, but we should see those prices very shortly. Today’s market we were off -147 on the Dow and -20 points on the S&P emini futures at 1090.

We are on our way to another good market call of +50 S&P points, right behind the +50 point call I had days before. It is a good feeling to able to see and call out market direction.

With today’s and yesterdays action, I would be thinking that this move down may push the sentiment numbers to the downside, kicking in a buy signal at 35% or lower. If we get it, I will report it here as soon as it comes in. Currently we stand at 37% and very close to a strong buy if those numbers come in.

These numbers are the Investment newsletter writers opinion on market direction. They work in the exact opposite way you would think. If only 35% or less of these newsletter writers believe that the market is going to go up, a minority position, then it will go against them and there call. This leaves a lot of skepticism, fear and anxiety, just what you need for the market to advance. The majority is never usually right.

So, look for a move tomorrow  into the 1080 area or better. I could see the market moving short early in the session and holding as the Federal Reserve will be posting there interest rate decision around 11:15 West Coast or 2:15 New York time.  The Federal Reserve interest rate decisions have not been as big a deal over the last few months, but I have a feeling that this one will bring in much more volume and movement then we have seen recently. It will be a big day tomorrow and I would exercise caution for all traders.

Many traders take this day off as the emotions will be running wild for sure. Today’s S&P trades below. I also have a U-Tube Video of my first trades which can be accessed in the top right corner of this website under “Video Gallery” if you care to watch. Good Trading and be safe.

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Resources

Thursday, February 25th, 2010

tradestation.com
This is what I recommend to start your trading business. They are data venders and brokers combined. They are who I use and this is where you will have all the custom indicators I have recreated to help place your orders. They have been rated number one in many categories. They will provide the charting applications you will need as well as the broker exchange needed to place your transactions. Minimum to open Futures account is $ 5,000 dollars to trade the E-Mini S&P Futures.

ampfutures.com
AMP Trading is a great alternative to tradestation and offers a much lower dollar amount to open an account, $2,000. There day trading margins are a lot lower as well. They use the Ninja trading platform which will work with my method.

Economic Calendar
This is a good site to see what is coming up in the economic calendar. News releases, economic data, fed interest rate meeting announcements, etc.

shadowstat.com
This website gives you more of the real economic picture by publishing data that more clearly reflects the current environment. The work is done by John Williams and have found the site to be insightful in providing an alternative view of what is happen in the U.S. Economy.

market-harmonics.com
This site gives you contrary readings on a variety of investment instruments. One being Professional Investment newsletter writers. When extremes are reached, in market sentiment, a likely turn in direction is often seen. I nice little tool to measure market extremes.

intouch.org
This is a site I often go to which helps me grow in other area’s of life. It may not be for everyone as it is a Christian website to help those who are open to expanding there relationship with God. I am a Christian but I do not impose my beliefs on others, but for those who may be open to this line of thinking, I do find it a big help in numerous parts of life. It does relate to day trading in that being spiritually grounded is one more factor for those seeking to accomplish there goals in life. In addition, often we face struggles and challenges in numerous area’s of life, those difficulties can cause us to be so shaken that it will be carried into our personal trading efforts.

I particularly like to go to the broadcast section, then to radio archives and scroll through the topic’s to help with what I may be going through, you may find it beneficial as well. There is an area that has some great subjects that I believe are related to living your dreams and reaching your goals, which can be to become a successful day trader.

Go to Broadcasts, then to Radio Archives and click on March 2009. This area has 5 titles that I really like and they are all in one area. The titles are 1) Thinking our way to success  2) Time for success  3) Power of persistence  4) Belief brings success  5) Overcoming obstacles. The messages are about 15 minutes each part 1 & 2 and will give you inspiration and insight to help meet your trading objectives and life goals.

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Is Market Sentiment Forcasting Rally or Sell-Off ?

Wednesday, February 24th, 2010

Today is Tuesday February 23rd and the markets are seeing the selloff that I saw coming the other day.

This is the sell-off I saw coming the other day, but it got a little delayed by the Fed announcement and maybe other things. The market did not want to go down on cue and thought it would hold up a spell to get some on thinking that we were going to continue straight back up to the top.

That may happen, but things don’t usually move in a straight line, at least not at this juncture. This move down is actually a key component to establish the next move, which ever way it decides to go. This move down will be the road map as to the next move as in a game of chess. The players are just positioning their men to take down a bigger army. Who will win the battle? Then next, who will win the war? Those are questions we are not able to determine at this time, but this setup is key.

The sell-off in my estimation, has at best, a little more to go. We are establishing a pivot point that is going to determine the next move. It is possible that we just continue the sell off down and take out the previous low and then some, but something is telling me that may not exactly happen. I always say, that we need to keep an open mind and look both ways before we go into traffic, so we don’t get hit. Get it wrong and you could be road kill. Don’t have it all on the line, not ever, no matter how sure you feel you are about a move. That said, the possibility exits for this kind of scenario.

Tomorrow, we continue with the sell-off after the market get the unsuspecting to bit on a rally long. The day has the makings for a trend day short after the initial up move. To everyone’s surprise sometime before the end of the day, we get large buying interest and we close well off our lows. This sets up for a reversal day rally the next day and over the coming days we challenge the pivot high that was established today and take it out for a sprint back up to the previous highs recently set.

That would be quite a spectacle for the trading and investment community to see. The market sentiment is a bit too weak for a sustained down move from here. Don’t get me wrong, anything can happen at any time and we always need to remember that, but this to me seems like a senario that would currently take many by surprise. As of last week the professional newsletter writers were only 35 % bullish. That is a figure that in the past has sparked rallys of significance. Now with todays sell-off, they made their new poll numbers as of the close of todays sessions. With it being a large down day, we could see many on the fence jump into the bearish camp and lose heart for this bull move. That could influence the market sentiment even more. Those people send their market forecasts to the public all across the world, giving them there call for the stock market, as well as numerous instruments. The main thing is, that they are usually wrong and giving that advise to the public at large, gets them to make the wrong call as well and lose money. That is just how it works, always has, always will. The majority never get it right and that is something that can be tracked and traced, amazing.

The above scenario may or may not happen,  but I think there is a good chance it will. They may try to hold it up for an extra day before it plays out, but we will see.

Today I just took a couple of trades and have a chart of it below. The first trade was for 1 point short and the next trade was for .50 point and 1.50 points. The larger portion was on the second half and was enough to get my daily goal. It only took about 15 minutes, which is what I like. Get in, get out and be done with it. I know without a doubt I could have picked up a bunch more points today. The price action was real good. The volume was high and the market was not messing around with all that slow action or no action I should say in the afternoons as of late.

It was good to see a little life. I am sure it will pick up as soon as the right catalyst triggers it. Picking up a few points in all of that action is not really that hard. Timing is the thing. If you think about it, that is what stands in front of so many traders who are on the verge of bringing it together. TIMING. Do you have it and if you don’t, how do you get it.

Many times traders do have it, but they just dont’ know exactly how to line everything up. Many have tried and tried, but it seems to just slip through their fingers every time. Having belief is often not enough.

Every trader needs to have a written plan of action to trade the markets and do it successfully. No plan, no success. You can not leave this to chance or a feeling. You need to be able to duplicate your efforts again and again. That means you need to do the same right thing again and again. If you don’t have it written down, how will you know if you followed it?

Excellent timing is the key. When to go long or short and when to wait. Waiting is itself a “Trade”. When you are waiting that is a trade decision and is just as much important as putting one on. Getting your first trade right in the session is very important. Exercise excellent timing, relax, take a few deep breaths and get plenty of oxygen in your lungs and wait for it to come to you. When you see it, don’t wait and second guess yourself, “TAKE THE SHOT”.

Good Trading, to all !

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Federal Reserve Interest Rate decision tomorrow

Wednesday, December 16th, 2009

Today is Tuesday December 15th and the markets backed off a little today.

The S&P was off about 6 points and the Dow around 49 before it was all said and done.

The range of movement was terrible again today. I saw from around 10 to 12:30 there was so little movement you might have wondered if the markets were even open. You could expect more of that tomorrow as the Federal Reserve Open Market Committee meets tomorrow on interest rates. They will decide if the rates need to go up and the answer to that is probably NOT. The producer price index came out today if I heard right on the radio and it may have shown that prices increased, but what can the Fed do. With the economy on the still on the edge, they do not want to raise rates, that may coke off any hopes of a recovery, or that is how the argument goes.

This economy is messed up, it is hard to see how it is ever going to get fixed. With the way things are being done at the top, there is a lot of work to do, let me just leave it like that.

If you want to see how things really are, go to my website, www.sniperdaytrading.com and scroll down to middle of the front page and look on the right side. You will see a debt clock and under that you will see, something that says “click here at your own risk”, a little humor goes a long way when you look at this stuff. If you click on that link, you will see one picture of the whole U.S. economy. If you look and Think about what you are seeing, it won’t take long to see how things really are. It may take you some time, but don’t forget to look at “The Bottom Line”, as some on Wall Street have said. You will see how things really are. Some may really not want to know and if thats you, don’t look, no kidding. The last line of that page is unreal.

Anyway, back to the markets, I guess I got on a sort of rant there. Well, the Fed is going to decide what to do about rates and at 11:15 West Coast time, the news will be out and the trading will begin. You will see volume and movement, a lot of it. It is not exactly like it used to be in the past, but when you compare it to the movement we have been seeing these days it will look like a lot.

Typically, you will see movement in several directions as the market does its typical shake out of position traders. You will usually get a mixed interpretation of the news as prices go up and down wildly. It won’t be until a few misdirection take place that the real direction will emerge.

caution is in order. I mean it. Anyone who attempts to trade the news at this time had better know what they are doing or you will be sorry, that is for sure. If you trade it at all and I will probably not, traders should wait a little bit until the dust settles before trying to participate. Occasionally, it will take off in one direction and not look back, but that is not the rule. Be sure you have your stop in place at the moment of order entry or you will be sorry.

You can expect price movement possibly the first hour and after that, it is going to slowly go down and down to nothing. Around 11:00 am, it is going to perk up and the it is going to get wild after 11:15 am West Coast.

That is the best advise I could give you. Other than that, we are up against the brick wall. Resistance looks stiff at current prices but anything can happen. I always say that and this time is no different. We won’t be able to see the sentiment numbers until Thursday and so will have to wait on that.

The daily momentum is still down, with the weekly and monthly up. The 120 minute chart is still pointing up even with todays drop. The hourly has just turned down, which is much more sensitive than the 120 minute. This setting smooths out a lot of the false breaks and keeps the momentum alive for a long time until it really turns.

I did not trade today, I saw the price action was similar to yesterday and did not want to have a repeat. The early morning open had a bit of a twist today. I did see that the price action was choppy and going nowhere on the open, what a twist. That is just like the market to do that, when you think you will get movement, you get nothing but chop.

Taking the pulse of the market is essential, and could have kept you waiting until a little after 7 am when we saw a solid break out up, in two waves. That is all the market had to the upside and experienced draw downs throughout the rest of the session.

One last observation and I will talk more about it tomorrow. The end of the year is approaching and we have not had any meaningful sell off as of yet and it is possible the sellers are waiting until January 1st to sell. We have a 66% return from the March 6 bottom of 666 ( 3/6/09) that is a little weird. To many 6’s there for me, but I didn’t do it. It is what it is. The thing about it is, if the selling takes place after the 1st the taxes on any of those big gains will be postponed for another year. Someone out there is thinking about it, more than normal because of the large returns, much bigger than normal. Just food for thought.

Until tomorrow, “Good Trading” and be careful!

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Reversal on Wall Street

Thursday, September 24th, 2009

Today is Wednesday, September 22nd and the markets were on the move today.

Things started to move after the fed announcement at 11:15 am this morning. The market shot up several S&P points only to sell off soon there after. It looked like an 18 point sell off from top to bottom in less than an hour. When you get moves like that, it is best not to fight it. Look for entry points in the direction of the sell off. If your timing is not right you can suffer a loss, so stay alert for the next one.

That sell off today, did not look to good for the bull’s. The current uptrend is still somewhat in tact but it can not suffer much more of a draw down from here. The bulls need to come back in and bid this back up. Another day like today and it may all be over. We will get that bounce back up that I was talking about yesterday and that is going to tell the story. If it is a week recovery bounce, the bears may elect to sell into strength and there goes your rally. Very critical area, so stay alert.

We came very close to 10,000 Dow and not far from 1100 on the S&P there may be traders and investors jumping the gun. No one wants to be left at the gate holding the bag. You look down into it and find out that its empty inside. Many of these guys probably said I had enough and started to close out positions. Well lets hope the rally can stay in tack for a little while longer. It will not be up to me, but we can choose to see it, then react off of it.

Below, today’s turning points.       http://www.screencast.com/t/oDxnBv2Iw

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Dow Hit Resistance at 8240 + Level

Friday, May 1st, 2009

Today is Wednesday, April 30 and resistance is met at 8240, will it break through?

Today’s trading went easy, picking up all trades entered, 8 for 8, but all the trades were very small contract size. I just took it easy because yesterday after the Fed announcement, which I don’t even know what they said, I took a trade that looked real good. I planned it for a high point move and it played out as planned, 5 1/2 points on 5 contracts, 1375. So I just took it easy today and totaled little over 4 points, but just on a few contracts.

Yesterday, I said to watch the 8250 level, that was going to be a key resistance level. Well, it went right up to it yesterday and retreated like it saw a ghost, straight down. Today, it went for a second run at that resistance level, same thing, retreat. Two attempts and no luck. That level will need to be broken to the upside for the trend to continue. Tomorrow, I will show a chart of it, looks very clear.

Also, in looking at the Fed news release, it was funny to see it play out exactly like I said that it usually does. That is, after the announcement, it will shoot in one direction, to suck players in, then over shoot in the other direction and take everyone out and then it will establish the move that it wants to make. Pretty much exact. Once it hit that 8240-8250 level, it went straight down.

All of this is not really that important.  It’s only important that you are able to position yourself to take advantage of some of these moves and I did that as stated above.

I will post a full article for tomorrow’s blog and possibly show the trade after the Fed news – I recorded it!

Have a great evening!

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

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Fed Decision Day Today

Wednesday, April 29th, 2009

Today is Wednesday April 29th and the market is waiting on the Fed today.

In possible anticipation to what the Federal Reserve will do today, the market is making a move. The move looks like it is on the UPside, at least for now. There is more room in this market like I having been mentioning this week and last. We shall see what is in store. The Dow does have some pretty strong resistance around 8250, so that will be a number to watch. I will talk more about upside targets in the next day or two, but remember that number.

The trading as I write this has slowed to a snail’s pace at 9:00 am west coast time. I will write about what happened this afternoon on tomorrow’s blog. What usually happens when you have a Fed decision is the market will move early and then continue to slow as the clock gets closer to around 11 am. Then it starts getting a bit jumpy in anticipation of the news. Traders are trying to outsmart the news and take positions before hand, which is not usually too smart. Most of the time, you will get a move big enough to knock out any close stop positions in both directions and after that happens it will make its move. It’s hard to say how it will turn out, but the momentum right now is to the upside. Be careful.

Today’s trading took a total of 45 minutes, from 7:45 to about 8:30 west coast time. If you look at a larger time frame, you can see that there was only two real moves of any significance during that time, one down and one up. Seeing that the market had made a significant move already and it may just be in a short chop zone, I elected to shorten everything up, given that today was Fed day.

That strategy seems to have worked just fine for me. I had 9 trades and picked up a little over 4 points and got my daily goal. The thing is, I did it in small bit sized pieces. I followed my timing model for very short moves and easily picked up my trades that came in the form of mostly 1/2 point trades. The moves traded for more than a half point and I am just fine with that. After my fill, the trades did not go far, before they started to run out of gas and then reverse.

The thing is, I was in the reverse and then again the new reverse and so on. I could have only taken the two moves that showed up, but at the time, I did not know which way the market wanted to go and if it had follow through ability. The overall trend was up, but there was some down drafts in there.

During Fed day, there is usually a lot of indecision and rather than try and be a hero, I just took the very high percentage trades that I knew I could get, 80-90% usually. While doing this, I was running only a three tick stop, but once the move started in my favor, it easily moved only the short distance that I needed it to go.

My strategy is really only targeting for 2 points plus daily. Since I am trading smaller, 5 contracts, it takes double the the distance to get to my goal and that’s fine. Had I been trading 10 my end result $’s would be 2K instead of one, again fine. The point is, I moved in, got filled at my entry point and quickly got out. There was no struggle here, just waited until the time was right.

If you are going to have anxiety about missing a big move, this is not going to help you. You have to know when to trade for the bigger moves and when not to. After having significant moves to the upside already and coming into a resistance area, you can’t expect the market to give you what you want, you have to take what it will easily give you with the least amount of struggle.

Had I been trading earlier, I saw two great set ups for some real nice big moves. I would like to think I would have had some of that. Just after the open, a real nice Symmetrical Triangle was setting up, plenty of time to see it develop and take the move for a split trade run. First half locks in guaranteed profit, second half allowed to run. At around 7 am, a very nice Rising Wedge with a confirming break, good for a nice counter trend move, followed up with a Symmetrical Triangle continuation breakout that piled on a real mover. Again, a great split trade setup.

You don’t need many moves to pick up a daily goal of 2 to 3 points, so keep your sights realistic on a daily basis. It’s nice to think you can pick up 10 points a day and there are days that can happen, but keep it simple and modest. You will come out ahead in the long run.

The mental challenges that you will potentially face along the way will be enough of a victory to overcome, while attaining a modest daily goal. That is why it is called a DAILY GOAL, because you are expected to get it every day. It is not called a Home Run Goal. If you do the math, trading 5 contracts for an average of 3 points a day, in a months time, is $17,500 for the month and just two net points $12,500. That is only two little points, but every day. Day after day.

The problem is, that most people see that two points is not much and think that 10 points should be the amount that they should get. When you think like that, it’s like grabbing a handful of sand at the beach. Because there is so much of it, you watch it all fall out between your fingers until you realize that you don’t have any sand left in your hand. WHAT HAPPENED? Think about it!

http://www.screencast.com/t/mix1ShOmxl Today’s equity chart

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Market Indexes, Holding On To Their Gains

Thursday, April 23rd, 2009

Today is Thursday, April 23rd and the markets are not giving up their multi week advance, just yet.

With one hour before today’s close, the S&P is up slightly and the Dow is up about 30 points. Recently the market has flattened out and one would come to expect that a deep pull back is brewing. That may happen, but don’t just bet on it yet. We will need to see more in the next couple of days.

The market sentiment has not come out for this week, but it did move up 6 % to from last week, which would represent a neutral reading of around 44% ( 35 is bullish and 55 is bearish). I would definitely be watching those numbers. If the bullish reading increases to the 55% range, start looking for a multi week short entry. It may not come for some time, we will have to see.

There is more room on the upside for this market to slowly drift higher. The current daily trend is still intact, although it is in dangerous waters. Generally, if the market keeps going higher from here, I think there is a greater risk for a sell off of a greater magnitude. If this does happen, the bullish sentiment will continue to inch higher slowly drawing unsuspecting new money into the markets. A lot of people are currently taking the bait. Be careful, this market can implode.

There are so many things that can go wrong with the whole structure of the economy, banking, corporate profits, unemployment, another wave of foreclosures and the list goes on and on. Don’t get sucked in, be careful. I just read on Yahoo news the 10 largest countries that could collapse. Mind you, some of them are small, but Mexico was on the list as well as Argentina and Venezuela.

The Mexico one would be very bad and it could easily spill over into our country. Again, caution is in order. That being said, there will be a lot of increased volatility once the news starts to heat up. Let’s hope it stays quiet for a while. I can handle low volatility just fine. If things do change, I will be looking to do more Pyramid type trading to capture some of those bigger moves, but with very low risk.

Today’s trading went just fine, I did not stick around too long. I just picked up my daily goal and called it a day. I am still not feeling very well and I am not too sure what it is. It is definitely slowing me down from doing other things and I am not really liking it too much. I plan to rest up over the weekend and whatever is bothering me, I hope it’s gone by Monday.

Today’s numbers went like this: 3 losses, 9 gains and $1,200 in profit. I had two split trades, the first one for a loss and one after that for a gain. Mostly, I traded all in/all out today. The first two trades were losses and the second one had a two tick slippage to it, making that loss worse.

Both of the first trades were bad trades. What I mean by that is I did not go into it doing and seeing the right things. If I take a loss and I did the right things, no problem. But when I go outside my trading plan and go in too early or too late, I get a little miffed.

I took a 10 minute break and tried to get things sorted out and did. Almost all the trades after that were gains. I am pretty sure it was because I was not feeling good, I did not have good focus and patience before those trades went off. Oh well, I came right back to catch my daily goal without much problem.

I will keep my eyes open for another pyramid trade set up and if I see a good one, I will try and record it.

That’s it for now. Have a good day.

http://www.screencast.com/t/2UAgzMNA Today’s equity chart

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Federal Reserve takes drastic step, Buys 300 Billion in Treasuries

Thursday, March 19th, 2009

Today is March 18th and the Federal Reserve took a big step to buy treasuries.

All I can say is, “What a day.”

I did not know that today was a Fed decision day. Shame on me. I usually check the economic calender for that. I don’t usually pay too much attention to news, because it always shows up in the price anyway, but that is one I always look for – because of the explosive moves following the news.

It usually happens at 11:15 am West Coast time and I was in a trade just before the announcement, with only 1 contract and then, boom, a 10 point move for the S&P in minutes. I re-entered for another move up after a consolidation for another 11 point move and again I only had on 1 contract. I kept re-entering long, and some short, to the very top of the market.

The S&P hit 800, which was the support at the purple trend line that I had talked about a couple of months ago. Support, when broken, usually then becomes resistance and the market traded right up into that resistance. After noticing that,  combined with the fact that now we had traded exactly to a 62% retacement from 873, the last recent high, to 666, the last recent low and back to 62% retracement at 800 and previous resistance, it made more sense that this would be a higher target for the market to trade up to. And it did – with me in it.

Once the top was reached I saw a good spot for a short and went with it, still trading very light, I think I had 2 contracts there. That was good for about 12 points to the downside. I must have had about 50 S&P points in all, which is about 25 times the amount I need to get my daily goal of 2 points, but that would be at 5 contracts. I traded very small once my equity started to get over $1,500, but it added up real fast for a finish to the day at $5,500 after commission. I took 33 trades total. Yes, that was a lot. But it still turned out better than 75% winning trades in about 3 hours. I have a couple of short video’s showing some of this, take a look below, at the end of the first one is where the Fed released the news and the market shot up.

I must say, that I was a little surprised that the Federal Reserve said that it was going to buy 300 billion in Treasury securities on the open market and 750 billion more in mortgage backed securities, bringing their direct involvement to 1.25 trillion. This is the first time they have done this since 1960. Does anyone know what that means? To me it looks like there was no one to buy the treasuries. China said last week they were very concerned with the U.S. debt market.

Do you know that the Federal Reserve is a private corporation for profit and is not a federal agency. It’s as much Federal as Federal Express. If you did not know that, all you have to do is Google it. The Federal Reserve is owned by a group of private banks from the U.S. and Europe. Basically, the government brokered out the job to a private banking corporation. I know this may be a shock for many, but people are reacting to the news like this is a good thing. This group is beyond reproach and no one has ever performed an audit on this group.

It is relative to the markets and to the economic equation because, while it is holding interest rates down for now, it will have a reverse effect in the near future. The Gold market did not like the news at all trading up nearly 6% for the day at 965 an ounce. The dollar did not like the news at all either, dropping against all major currencies. But the stock market did like it, or so it thought.

It is going to be good for the market in the short run – how long that is, I don’t know – but in the long run, it will be disastrous. There is so much money being floated out there right now that no one can keep up with it.

Here is another thing you may not have known. The total bail out so far is said to be 8-9 trillion dollars. That is a lot of money. Again, why is that relevant? It is going to cause inflation like nobody’s business. All I can say is be careful with your long term money. Let’s hope the market moves up over the next few months giving those who want to get out of their long term investments an opportunity.

Everyone has been trained in thinking, “it will come back, it always does”. This time could be different. Do your own research and think for yourself. Don’t listen to the experts and don’t even listen to me on these matters, but spend the time and check it out.

If you do a Google search using “total bail out so far”, you will get a few figures, but they are all up in the range I mentioned. It is nowhere near the figures we hear on the nightly news.

Sorry for the ramble, but it kind of ticks me off when I hear news like this. To those who are considering a career in trading and have the risk capital, the time to make money is now. The markets are moving nicely up and down and there is profit to be had for those who can wade their way through the noise.

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

http://www.screencast.com/t/u9xVvzQlpfW             Some of today’s live trades

http://www.screencast.com/t/kTfMA2×13w              Some of today’s live trades

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