Posts Tagged ‘market reversal’

Stock Market Buying Little Time

Monday, January 23rd, 2012

Today is 1-23-12 and it would appear that the market is buying little time since last weeks anemic performance. The volume has been very slow and the movement has been limited. This is not a very exiting market at the moment, but it will or should change. Looking back so far, the market only moved about 3 points on a closing basis over the 1308 target level I mentioned last week. We did not get the reversal I was looking for last week in the daily market, but we have not moved far off that level either. Today, there was a bit of a reversal that took place but am hoping for the market to hold up at least one more trading day through tomorrow session. This may help push the bullish market sentiment over the edge, thus setting up a good healthy market drop, just the opposite. Last week there was a pause in that arena and will be looking ahead for insight

Last week, I got a little sloppy and careless and had a couple of back to back losing sessions. That is a sign that I am not in sync with the markets and time for a break.  I stepped back and did not do a thing. Time has a way of changing things if you let it. When you are not doing well for what ever reason, that is not the time to force your trades, or go for the get even mentality which most often leads to more difficulties.

Taking a step back is never in my mind a bad idea. The markets will always be there, but you need to make sure that you are there to start up again. Being aggressive has its place, but it is rarely when you are not trading well.

Above are the trades I took today. I needed more room to fit it in so I am showing the second chart that fits together with the one chart that I usually show. The two charts fit together and act as one chart, not two, but this is the larger view of the two. I rarely ever show this second chart but elected to today. There is a series of charts that are smaller and a series of charts that are larger on different screens. Each of the screens are for different conditions and objectives. They all still fit together and can be used to gain perspective or trade with larger or smaller targets in mind.

It is all price action driven with the trading indicators confirming the method, not the other way around. That is different and unique when compared to others who will generally fit a method around trading tools. Every trader needs a solid understanding of how the price flow works, as the market will take you up only to take you down and if you don’t know how to read it, you will get frustrated and constantly second guess yourself. That is no way to trade these markets as professionals feed off of this kind of uncontrolled behavior. Don’t let yourself be taken down, empower yourself with a working knowledge and the trading edge. It does not have to come from me, as this is my own approach that combines low risk with good reward.

In today’s trading, I took three trades all profitable for good modest gains. I could have had more and made a few notes on the screen above, but I will never complain over a good clean day. I would only say that I saw a little late the likely path of price short on my first entry and wanted to be sure that I booked a gain on my first trade out. Again, all OK. I just had to wait out the rest of the moves and really exercised some patients to let this market play out a bit.

OK, that is it, until next time- good trading to all.  Vince

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

Market Rallied on Called Number

Thursday, December 15th, 2011

Today is Thursday December 15th, 2011 and we did see a market reversal on cue from yesterdays call.

I stated yesterday that we would see a sell off early on down to the 1197 area and that would spark a nice rally. We saw that exactly, but the sell off came in the night session and we did rally significantly from that point, +22 S&P points right after. From there, we saw another sell off back down, but things leveled out and we stayed in a very narrow range for the rest of the session. I was looking for a regular session move to confirm the original early move to the number, but it did not come in time before the session ended, it may show up tomorrow?

In today’s trading session, I took roughly 5 trades and came out with a nice day in hand. I will have to admit I was reaching for today retest of the early numbers, that I called for and as mentioned it did not come in time. Still was sharp enough to close out some of the moves with profit locked in.

At the end of this week, I will be taking off from trading thru the Holiday’s and restarting in January, and was trying to beef up some gains today to make up for time off. I have enough confidence in the trading method that it would produce more if I kept at it and that would have been the case if we had some movement. Early on in the session we saw was some good moves and would have done well if I was there to trade it. Let me post the days trades and will continue below.

You can see the spike down early on in the chart as it hit the called area, within one S&P point. I was debating to call 1197 or 1198 yesterday and chose the lower number, but I will have to say that was a pretty good call overall, within one point.

To trade off of that would have been nice, but I was asleep as most us. I was looking for a retest in the regular session, but had to take profit on those 3 key area lows to lock it in as it was just taking it’s sweet time. I traded almost 4 hours today and that is way more than I have done in months.  I can only wait on the price action and take what it offers and that is what I did today. I don’t want to overly commit to a call or position that will cause me harm because things change and we need to be able to change with them or suffer.

I was not about to suffer today if I could help it and that calls for being conservative and not overly aggressive. I could take that aggressive stand more often and increase size at opportune times and come up with more, but have been content with the little I do, plugging away.  Maybe one day I will step it up.

There is plenty of time and find that I am still learning things about the market, as we all should be. No one arrives to a final destination as a trader. It is a constant evolution that continues its advance forward to more and greater insight. That is how it should be for everyone else as well.

Being a good day trader takes time. If you have a good method, a good mentor and some tools, you can cut that time down considerably. That could mean the difference between years and months. I know it has taken me the years side to get where I am, as I literally learned it all on my own. Lots of trial and error with a extra measure of error as is the case with many traders. I never bought or paid for anything trading related except a couple of books back in the 80’s and that is the truth. I am not saying that was a smart thing to do, but just sharing my experience. Thus, I have seen a lot over many many years and as mentioned am still learning.  This has shown me many things about the price action of stocks, index’s, option, futures, and currencies.
Everyone is in a different place and we can all see the allure that trading offers, but I feel traders who are starting out really need to go much slower than they do. It seems easy, but it rarely is. It may be simple in some respects, but that is met with the unseen challenges of us. We to often are our worst enemy when it comes to bridging the gap towards profitability. If we could take an equal amount of time for self-improvement in all area’s of life, you would see how much that would help your trading. This is the unseen sword that can slash us to pieces if we are not mentally prepared. On the other hand for those that see the essential benefit for taking action in this fashion, they are rarely disappointed for their efforts
That’s it for now, I will be back tomorrow for “the rest of the story”.

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

Looking for Market Reversal

Wednesday, December 14th, 2011

Today is December 14th, 2011 as the short term selling continued today, but am looking for a market reversal in tomorrows session.

I could see the S&P futures moving on down to 1197 early on and think that we could see a significant bounce and eventual turn around into next week. This is just my opinion and I will be willing to trade long and or short depending on the days action. This call is mostly for the daily market as I think the selling will start to dry up at the above levels.

In today’s trading I took 3 trades and invested about 30 minutes into my trading before coming up with enough for a modest daily goal. I came into the first trade a touch late but the second attempt was right on.

I put back up the same screen shots as I normally do but did add one other thing into the picture. There are yet more things I build onto the screen and other time frames that are tied directly into each other to make a complete picture, which is not shown. Let me post the days trades and I will continue below.

I recently in a few previous posts, blanked all the indicators off the screen for a reason and that is to make the point that traders really need to trade the price as it moves on there screens. If you only rely on trade indicators you are not really making progress. We need to know why the market moves, not just that is does. Knowing the “why”, is the empowering part that is missing from many traders. If we only react to what we see as trade indicators signal long and short, we can to easily get whipped around the screen and feel out of touch and ultimately out of control. So, the key is learn and understand price. How it moves, how it reverses, when is the likely times for turning points and continuation points and do all of that while risking very little.

Being able to zero in on the low risk spots is so very important. Trading with a 3-5 point stop to make 2 points on a trade is totally out of the question. If you are doing that, you will have problems sooner or later. The key again is risking little for a high probability of making the same at a minimum or preferably 2 to  3 times your risk.

Question; Do you catch yourself saying, “I think the market is going up” but don’t really know why?  If you had to explain your reasons for the market move to go up to someone and or had to write it down, could you. If you can not do that, then you need work. You can not just say, “I think”, you have to know “why” it will and or should go up and have clear compelling reasons.

This kind of thinking takes place all the time and traders are pushed into trades that are far less than desirable. They then have to struggle to justify the position and then do worst damage by blinding themselves to everything that says it is going the other way.

All of this can be eliminated and or reduced a great deal if traders would not take trades solely based on trade indicators. Seeing how and why markets move and positioning themselves in those low risk area’s for gain with limited risk is where you want to be.

Don’t trade just to trade, trade with purpose and a clear understand of price action, the trade indicators could then confirm your decisions and may be a comfort, but don’t let it be a crutch from you learning what you need to know.

Do you want to have fun or make money? Many would say make money, but there action say a very different thing. Think about it. You can do both as long as you strive to make money first in a responsible manner, then that could be fun.

So, the moral of the story is, learn what you need to learn to trade safe and responsibly. What support and resistance is and how you can harness it to your advantage. Easier said than done for many, but having a complete trading method that is spelled out with rules and objectives will take a lot of the pressure off as you will be creating some structure to your approach. It takes time, for some a long time, and for others not as long and still others never get there. Do the hard thing, not the easy thing, that could be your first clue and assignment.

Good trading to all ! Vince

Tags: , , , ,
Posted in Trading Lesson | No Comments »

Huge Market Reversal after Bernanki Postpones

Saturday, August 27th, 2011

In Friday’s market we saw a huge market reversal that was orderly and structured. The market traded with purpose and conviction with huge trends that were very trade-able.

In a daily picture view, the market is marking time for a possible continuation move to the upside, but we could consolidate here for a spell. It would not be uncommon for price to hang out a little longer before a break of the last highs are made, but would have to leave open the possibility for the market to break to the down-side too.

It is possible and I have to see it that way. I won’t marry the trade, but leave this open as price attempts to continue its assent to higher prices.

I have a larger tick chart than normal, that is squeezed together, showing the trading signals generated or that one could have traded. This is a higher time frame, so you will get fewer signals but they will be much larger.   You would only need to catch one move out of the many in the session to make big money.

With this model, a target of 2 points initially, than moving to trail you position would have served you well. Trading multiple contract you can do that, and lower your risk as your maximum stop on this trading model would be 2 points. When you see a choppy market, this can easily give you a one to one ratio in a 2 point target with 2 point stop. You can go back over the last long term chart I posted and see how that would have served you.

The interesting thing is the trading method is not the trading indicators and really does not have anything to do with the method per say in only that the exact same signals at the exact same area are identical. Don’t get me wrong, we use the indicators to confirm in what is present for all different reason, but again, still consistent with the method overall. It is amazing to say the least.

It sure is nice to look at. Going back, the data really always looks the same. The moves are just not as big as they are now, because of the increased volatility in the market.

I just did a video for my members where I took this chart back for 10 days and marked up the all the past data with trade-able turning points that would be consistent with the method and did it in a 5 minute video, then went back and inditified with a verticle line all the entries and they were amazingly consistent with the custom indicator I show. I was not looking at the indicator to get the indicator turning point, but the price and its structure. That was a cool exercise because I had not looked at the past data before I did the video and was able to fly through 10 days of data turning points and telling why on many as I zoom through.

Being objective is what is always necessary to be able to trade this way. If you have strong opinions you wont’ see the turns. That is one aspect of the mental side of trading.

Traders face constant challenges while trying to out flank the markets. You need to end up profitable at the end of the day, with being right only an after thought of no consequence.

In a study by psychologist, they conclude that humans when fixing on an idea, we see what we want to see.

If we create mental maps and we have conviction to that map, we will blind ourselves from the reality that exits before us. We tend to overvalue those things that we own. Once we own a market opinion we tend to over value it.

We only see what we expect to see and are then blind to reality. A closed mind will cause you to miss data and not look at it objectively.

The professional trader has the conviction and boldness to act and the humility to accept that there may be more they don’t see at that time.

When looking at the market, an empty mind can do wonders for your bottom line.

All that to say, that a trader can trade at those market turns I have marked in this post and all the other ones if you are trained. The mental training goes with this along with ongoing training through out the week.

I have seen many trader excel and find there way through this trading method to be left with a hope, confidence and an increasing bottom line. It is all up to the individual and there determination to learn. It is all there for the taking, you need to have the passion and desire to go with it to keep on going even if get hard.

That is why and where mental training with a great trading method is key for success. You need the ability to follow through and not let your emotions over-ride your judgment.

That is why we never marry a position, but let the market tell us what it wants to do.

A simple approach is like I mentioned to approach this with a 2 point target and 2 point stop. You would have done well, and with a little more skill, the ability to discern when to ride up a portion or all of the move to higher prices. That does take a little more time, but it is within the method to learn when and on which trades to go for more.

OK, that’s it today, I will be back trading after labor day and will continue my posting of trades then. Enjoy, the rest of your Summer, it is going fast.  Vince

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

Three Types of Trading Decisions

Tuesday, February 8th, 2011

2-8-11;

Today’s market was up again with the Dow +71 points and the S&P +6 . What a resilient long lasting uptrend we are seeing since Thanksgiving. This market has gone up more than I thought it would given all the bad news, but it goes to show you, when you throw money at something what can happen. Is this smart money or some other kind?  That is the question on everyone’s minds these days.

The bullish market sentiment dropped last week by a few percent which is a little odd with such a strong market. Tomorrow, after the close, the new weekly poll will be taken by the professional newsletter writers and there stand on the current market conditions are noted. This gets sent out to their subscribers all over the world and I am sure people act on a lot of their recommendations. Those market opinions get tracked and recorded and are part of the numbers I look at. I don’t subscribe so, I only see these numbers on late Thursday.

The point is, we have been in an extreme market condition since Thanksgiving, which is very unconventional. This means these guys are finally getting one right. That is amazing. Usually, you will see the opposite happen at certain thresholds just like clock work, unless something bigger is brewing. This may be just one of those times.

With the market showing no signs of letting up, I will only point out that we are currently up against some very strong overhead resistance. It has happened before, but the element of time helped to relieve that market pressure, but what about now?  If we blow past these levels in the days ahead, I would be surprised. Is it possible?  Anything is possible, but I think the odds say that we move sideways to down as more time is allowed to pass.

I do think the easing on the part of the Fed, is a very big part of this market rally, but who could prove that. The timing of their easing policy is right in line with the Thanksgiving take off. In any case, we are very extended and caution if nothing else is in order.

I got back to trading today as the data issues at Trade Station were resolved. I took 4 trades with three of them for OK gains and had one loss for only 1 tick on the S&P emini futures.  Take a look below if you care to.

The loss I took for only 1 tick was an early entry and elected to exit it almost right away. Looking back, it only went against me by 3 ticks, but I did not know that then. Getting out was safer until the better timing entry just a few moments later, which happened to be at the same spot, but was then in a much better position to move out. I did not worry much about the two ticks of draw down after the second entry, because now things were in place. I missed one trade as marked with a no fill that would have been a good 1 point trade, but came up with a new long a few minutes later.

The price action in the market is very narrow and shallow, light volume. I often say, take what you can get easily and without struggle. If you start slugging it out, you are not entering at the most opportune time. Day trading is about timing and entering at the most advantageous times is what we should be shooting for. Don’t try and pick tops or bottoms, because you will be fighting the current momentum and anticipating a market reversal. The market loves to break through double bottoms and tops only to then reverse, but not before it takes you out.

Being exposed to price movements takes time. If, you look at the market price movement in any time frame, their is order there. It may look just like a bunch of up and down moves to the person with an untrained eye, but their is often predictable order within the charts. Not every move or section of the day displays this order, but much of it does. That is the part that you act on. Only that which you know to be true based on similar conditions of the past. We have all heard the term, “History repeats itself”, well, this is no different.  It does not always do it in the exact same fashion, but elements of its past always present itself in the current days charts, enough for us to take action on.Three types of trade orders, buy -sell-wait.

This only comes from knowing what to look for and when to take action. There are three choices when making a decision about the markets. Some think that their are only two, buy and or sell. Those are two of the choices but their is a third, to WAIT.  This is just as much a trading decision and would have to boil down to the most import element not only with the third choice, but within all of the day-trading experience.

Waiting to make a move has tied to it, “trade timing”. You are waiting for the best opportunity for you to extract your piece of the market and transfer that into your trading account. If you don’t wait until the time is right, you will force trades and your then your struggle begins. That is why I say, I like to take the easy and obvious trades with little struggle. The move should move out just after my entering. If it does not, then I may have been to early and have to question my entry.

When trading we always need to keep in mind capital preservation. If we are always shooting for the big move, we to often get nothing and minus nothing, a loss on the day. Sure, we may leave some on the table, but that is emotion of greed speaking there. We trade for income, so find your way to safely get what you can, limiting your risks while doing it and enjoy the fruits of your labor.   Good Trading to all !

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

Market Now In Position to Rally as Bearish Sentiment Builds

Wednesday, August 25th, 2010

Today is Wednesday August 25, 2010 and the market stopped the bleeding in a nice market reversal off of earlier weakness.

Today’s market reversal was pretty critical, as we saw a little more selling yesterday than I thought, but all is well. That is not what you would here on the news. I am sure everyone and their brother is bearish right now and understandable. I just can’t buy into that right now, which is very unpopular.

I would bet with the extra selling yesterday, the bears think that they have the upper hand and can smell blood. I hear a lot of talk about a market crash and the “Hindenburg Omen” and such, but I just don’t think it is going to happen just yet. As mentioned I could be wrong, so don’t base any big long term market decisions on my say so, this is just my opinion.

With that said, when a majority are calling for a direction move, it rarely happens when they expect. I will be looking for a rally on Thursday and Friday as I said last week. (“We would rally later in the week, Thursday & Friday”)  We needed to get through the early part of the week without falling apart and even though yesterdays market did move down more than I first thought, I can see why and where other support was coming in at now.  A little after the fact, but today I was looking for the market to hold and make a market reversal.   In fact I do still have the majority of it in a open position which I rarely ever do. The situation called for it, was my thought.  I am protected and have a stop in place, so it should work out pretty good either way.

One thing also to keep in mind is, we are coming up to an election in a few months and the current party does not want to give up control in the House and Senate. One would think this should not have anything to do the market, but to often it does in reality. I won’t speculate on how, you will just have to use your imagination, but if things fall apart right now, it will most likely translate into a big shift in the Washington power base. A stable or rising market will give them a fighting chance. I have seen this to many times over the years to know that there could be some connection.

I am looking for a move up to S&P futures 1100 or so in the next few sessions. So, we will all just have to wait and see what happens. Below is a chart of yesterdays first 90 minutes and I have a chart of today’s action, but it is pretty scrunched up. Its the only way I could get all the data in showing where I closed out a portion of my position at the top. I did have a couple of losses early on, but came back with a nice gain for +5.25 points and +12.75 points. I still have an open position as I mentioned earlier, but have a large profit built into my stop, so I should be good for further advances if they come. If I get a nice push on the open or in the night trading, this will make up for not trading the last week and half for sure. The charts below.

Good Trading to all.

P.S. will update all action and new market sentiment numbers in tomorrows update.

Tags: ,
Posted in Market Call | No Comments »

Daily Chart of S&P 500, What Do You See !

Friday, August 6th, 2010

Today is Friday August 6th and what a ride on the street today as we saw a big market reversal take hold in the last 90 minutes of trading.

At 5:30 a.m. eastern time, the market got a reason to sell off, as the jobs data came in worst than expected. There was hope that a higher than expected number would spark a rally, but gave way in the form of a let down. The selling could have been a whole lot worst, as the market shifted down a notch to a level of major short term support.

In the context of the overall move, we have not done any technical damage to the chart, as the market bounced right off of this major support. It does yet again, provide more room for an advance if in fact one shows up. The low in today’s market will be the line in the sand for now. Monday is going to be very, very interesting. If the market has it way and takes out say, 1106, just above the low of the day, I would bet that we will see lower prices over the next few days. There is upwards to 35-40 points under the market if the low gets taken out. So, that is the best way to forecast this market right now. If this, then that.

There is still very little bullish sentiment on Wall Street right now. This last week, the market sentiment data came out and it moved up to 38.5%. Actually, it stayed about the same, because last week, it had moved up a few %. Currently it is still very low and would be saying there is more to go. The market never moves in a straight line, or not usually, but for the time being, I can not overlook a break of today’s lows if in fact that happens. If that breaks, then, a big push to the downside is in order. It should be at least to 1084 and could be lower. The maximum I see is to around 1075 to 1080 and it could come in just a few days, but that is the maximum. There is major support at that level if only we break the 1106 area, just above today’s lows. I don’t think we have to break the low to get a market reaction that will temporarily send this market down.

With all of that said, the market sure showed some resilience, in only being down a few points after all the bad news and big drop. Some forget the wall of worry, of  the past. This may be like that, but this time, there is really something to worry about. All of our national financial troubles are really much worst than the mainstream media and government is letting on. I think the public senses that and is trading on there intellect.  Wall Street does not care how smart someone is, but only that they are in-tune with the pulse of the market. The majority is never right.

Above, I have a daily chart of the cash S&P 500 Index. I encourage you to take a quick look at it. You may see it a little differently than you normally would. I won’t go into it, but there is order in what seems like chaos. Knowing how to look at something is a start. I may post again on Sunday afternoon, but for now, enjoy the weekend and get outside and enjoy some of God’s creation. It can give a nice fresh perspective on life and our work.

As always, good trading, Vince.

P.S.  no trading for me today.  Relatives from out of town and have to many distractions

Tags: , , ,
Posted in Chart Patterns | No Comments »

S&P futures hit 1080 in Mondays Night Trading

Monday, July 12th, 2010

Today is Monday, July 12th and a pretty flat day on the Street.

No great volume or movement today as the market looked like it was putting in a top, only to have the market rally towards the end of the day. In the night trading, currently, we are seeing 1082 as the high, finally hitting the S&P futures 1080 + or – as called, but no market reversal as of yet.

The charts below, are from today’s action. A few trades early on, 10 minutes of trading in the morning and 30 minutes of slow trading in the late afternoon. I had limited time to trade today, but that was fine. Daily goal met.

That’s it for now, more in tomorrows posting. Good Trading.

Tags: , , ,
Posted in Trading Turning Points | No Comments »

Market Reversal and Rally at Breakout Point

Friday, December 5th, 2008

The last few days I have been writing about a possible upside breakout, that would slow down the sell off for a while. We are almost there.

Today the Dow did make a lower low that I was anticipating, by 25 points, than it made on Dec 1st and the S&P just matched that low. That was the bait and switch I was talking about. We got it on the Dow by a little bit and we did not on the S&P. 

I will have to look at this as a market reversal and the rally will be at a critical breakout point. Monday it will have to have upside follow through and convincingly break out above its previous high for the temporary trend reversal to take place.  For some reason, if it now takes out the lows of today, we will be in big trouble and a potential massive sell off will likely continue. I do not think that is going to happen, but we will have to wait and see. My best guess is we will be up big on Monday.

As far as my daytrading is concerned, I was able to get my accelerated goal for the day of 4 points. I had a few losses but I was able to come back.  The market started to make an upside break and I positioned myself for a few of those points.  The chart below will show a few of them.

On Wednesday, if all goes according to plan as my business plan calls for, I will be moving up to two contracts and when hitting 4 points for the day, it will add up to $400 for day and $2,000 for the week. My plan really only calls for 2 points, but I feel pretty confident I can pick up the 4 points meeting my accelerated plan.

Hope everyone has a great weekend and thanks for stopping by.

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

http://www.screencast.com/t/ghhtWG4k7

Tags: , ,
Posted in Trading Turning Points | No Comments »