Today is Wednesday, May 12th and we saw a little follow through from last weeks sell off.

Just before the drop the market was showing clear support at S&P level 1177 and Dow 10,965. As those numbers broke, the flood  gates were opened and the institutions and Banks jumped on the short side of the market and exacerbated the situation. Some say it was engineered, but the point is, it did not happen when it was not supposed to, it happened right when it should have. The move just got overdone as it cleaned out all the stops that were just sitting there. If your stop was at the top, you don’t feel so bad, but if you were in the middle to lower end of sell off, you may be feeling violated right now. The reversal back up happened without you and as this market continues to push higher as in today 150 point plus Dow advance you are feeling worst. All I can say, those who had there stop in the middle or lower end of the sell off range needed to move it up closer to break. This is in regards to the daily charts and stock trading in general.

After saying all of that, I see two things right now. The support that broken is often times now the new resistance. That would be the numbers I mentioned above. If the market were to act in a typical fashion, we would push up either in the night trading or on the open tomorrow a little higher from where we are here and back off pretty hard. I could not say how far it would go down, but it will be significant. I would expect somewhere around S&P 1120. That is a 57 S&P point reversal off of that number if in fact it goes down like that.  The sell off  may only be short lived as then the market could make an attempt at the old high from that point, it is possible. I would like to see the sentiment numbers before I go out that far.   If you see the market blow past the two numbers I gave above 1177 S&P and Dow 10965 with conviction, I would have to consider that the it may move straight up to the old resistance at very top.

So, to recap, look at how the market handles the 1177 S&P number( in that area). If it is struggling with it, look for a selling opportunity based on your own criteria. If the market blasts past that number with ease, it may be on its way to the very top at S&P 1217.

This is just what I see at this point, but I will be reacting to the current conditions as it unfolds and you should to, if you are trading the market.

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Trading to Win Mindset:  This is the attitude that traders need. You need to feel confident with your skills as a day trader to come out on top at the end of the day. Trading has many facets to it. Money management is very important and it can not be overlooked. Many times if I am doing well and I want to keep trading, I will start to lower my contract size or if you are trading stock your share size. By doing this, you are scaling out on your equity profit. If you make a mistake or just get stopped out, it is not going to effect you as much because your size is smaller. The key is to end the day in the green.

Starting off with the right frame of mind is key. If your skills are refined and you know exactly what you are looking for, you will not feel like you have to hope or wish your trade into profitability, because it is just going to happen. You have come and or will come to expect that. That is having a wining mindset. You create your opportunity, if it is a small scalp trade or a larger runner. What ever the market does, you will come to expect that you will get what you need for the day. That is why having realistic goals are very important. It will continue to feed that wining mindset that will help you attract the next positive trade.

The opposite is true. If you feel like you are constantly on the ropes, always fearful of getting stopped out, you not only attract negative trading energy, you will create it. the results are what you dread and that makes it all even worst. If you currently don’t posses the skills to trade and maintain the edge with real money, don’t trade. I do not mean ever, but just until you find the wining mindset needed.

I think it is best to have a mirror to follow. If you can prove in practice trading that you know how to handle yourself and can come out on top most days, you now have a model to follow. If you can’t do it in practice, how are you going to do it in real live trading. Don’t lose money you don’t have to. Trade only if you have the advantage. That only makes sense, but that is not what always happens.

If you feel even a little uneasy about a position that you just put on, get out. Don’t wait to be stopped out, close it out and reevaluate the situation. Let the trade come to you. Don’t be anxious, that will only create hesitation to pull the trading trigger. Day trading need not be a struggle. I know it is for people and that is why I am saying to those who can hear me, to just relax and as I said, let the trade come to you. Don’t go searching for it to the ends of the earth. If you have to look that hard to see what it is that you need to do, you are probably not ready to trade. If you do it anyway, you will only be paying expensive tuition. Don’t do it. Keep your money safe until you feel comfortable with the process and you have “The Trading to Win Mindset”.      Today’s trades below.