Posts Tagged ‘reversal day’

Reversal Day Off Highs

Tuesday, December 7th, 2010

Today is Tuesday December 7th and we saw a powerful reversal day in the stock market.

The Dow and S&P gaped up on the open so that the Dow could move on up to that double top high that I thought might happen. The move took the Dow to within 1/2 of one Dow point, to 11,450.81 before it retreated lower. Both markets traded at their lows for the day and marks a pretty important development. So often, traders will take that double top as a reason to unload some of their positions. What happens after that, often times is an exit for doors all at once.

The good news is out (no tax increases)  and is also another reason to lighten up on positions, the old adage, sell the news. Since the Dow was lagging as compared to the S&P as I mentioned yesterday, another good reason to bid up the price to the old highs. It often times acts as a trade to target by so many, in addition, it also acts like a low risk selling opportunity by others.

The main point at this time is, the market reversal. The index’s and the stocks that make them up, closed on their lows of the day, which is not a good sign for the bulls. This is the double top I was looking for and we now have it. The last few days we saw good price movement back up, but I can’t call those that bid the price up on the daily’s, “Strong Hands”. They are coming in late, because they thought they were going to miss the next big leg up, but the problem is their is not likely going to be a big leg up. These late comers do not have built in profit from much lower levels like so many others who bought off the lows in late August / early September. At the first sign of trouble, these guys will start to bail out, but only after they have big losses.

The time frame mentioned about was when I was calling for a big extended market run, just like the one we saw over the last few months. I called nearly the exact top with a 4 S&P futures points coming off those lows mentioned. That was 180 S&P points higher and 160 points from the 1060 area where I said confirmation of the move would take place.

That is all old news right now. The S&P did make a new intra day high today, but not a new closing high, so the top still holds. A new sentiment poll is coming out tomorrow and it is possible seeing new highs, even if they are intra day highs, will sway the News letter writers and thus the public, to become more bullish to add to their already strong bullish bias.

Today’s move is a mild version of the perfect storm. If the pull back continues off of today’s close, this could be all this market has in it. With the bullish sentiment lingering for a few weeks, that only makes the case for a counter move back down even stronger. It won’t be long. This is all of course my own opinion and is not to be taken as investment advise. That is just the way I see it.

Reversal Days are significant, in that a gap higher on the open, shows an over exuberance, combined with the fact that the market then closes on the low of the day. Not quiet the same conviction as it started out. This is often a sign to sell as it shows a lack of conviction to hold on at the highs of the day. This has to be some of the riskiest area to a long term holder of stocks right now in my opinion.

In spite of the Tax increase issues Obama is taking care of, the economy has some very deep seeded problems. To sum it up, everyone is drowning in debt, all across the board and it is not going away any time soon. If you go to www.debtclock.org you will see on one page the state of affairs we are in. Everything is on that one page, 76 running tabs on various aspects of the economy. It is a tough one to swallow, but that is the reality of things. The best we could hope for is a soft landing and not a crash. I would love to be totally wrong about this one. I have gotten so many market calls right over the last two years, writing about them well in advance, but this one is one I hope I get wrong.

This is all in the daily market and I follow it for a variety of reasons. It is part of a bigger trending market, which is then tucked inside the weekly chart, but it all unwinds down from there, down to the hourly charts, into the various minute chart settings and into tick charts. The various time and tick charts are all fractal in nature. They all bear similar price action traits relative to the time or tick chart intervals. A hierarchy of dominance exists  based on these intervals where the higher time frame swallows up the smaller.

This is true when trading stocks just the same as trading index futures. You can put Forex right in their too, as the trading principles I use are the same in all markets. Not all markets act the same, but I have not seen any market that can not be traded by my method.

In today’s trading, I stopped after about 2 hours, I was up for the open or close to it as today was just a break even day more or less. I had a couple of losses to start things off and took larger stops than I normally take.  The next few trades were for nice small gains and was able to get to even. I was getting tired and needed to stop. Break even is not really a bad day, but I can attribute this to trader error on my part and not the method. Losing days usually only come when I am going beyond the trade method. If I stick close to what I know, the points add up without much struggle.

Good Trading to all.

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Stock Market puts in Reversal Day

Thursday, September 30th, 2010

Today is Thursday, September 30th 2010 and the market looks like it put in a reversal day.

The Dow was up over 100 points just after the open as the buying kicked in from yesterdays inside trading day. The S&P was up similarly and just before 7am, the high for the day was hit. The market quickly filled the gap and then some as the drop did not stop until we saw 200 points shaved off the top in the Dow and 20 points off the S&P.

Today’s closing position was very important as it showed weakness into the close, putting in what I call a reversal day. That is not usually a good sign and we could see a break down coming either in tomorrow market, (Friday). I will give a few parameters that will show which way it is going to go.

Currently, we are still OK, but at any big daily turning point the market is always going to get tricky. This is part of that trickiness being played out.

I will be watching two numbers tomorrow, both to downside, to see it we will hold or not. The first one is today’s low at 1131.25 and the next one is the low set two days ago, at 1127.25.  Both of those will be your clue. The market is currently sitting on a major tipping point. I mentioned about the major resistance overhead and we saw that played out today. Now we will see if the downside support will hold. If those numbers get broken, you will see a big wave of selling come into the market. It is very likely that it will last a few weeks and take the market to as low as 1082 on the S&P.  There is support around that number, as we will be set with a whole new set of conditions.

Under normal conditions, the market is likely to sell off and break the numbers I mentioned above as the reversal day pattern is a good clue and we are likely to see the move down as mentioned, but I said normal conditions. We have not seen anything normal as far as economic reports and stock market behavior. A terrible report comes out and the market rally’s huge. That is why I don’t get to caught up in the reports, but they usually do have some connection to market behavior. That is normal and we are not normal right now. That is why we have to wait and see how the market is going to show us its hand. If the levels hold that is going to be great. It may just move against all the bears that are betting the farm on the coming drop.

So all one can do right now, is wait and see. I would be on guard for for the party to begin. The movement is going to start heating up, either way. Coming off the summer month slow down,  big players are coming out and they are getting ready to move the market.

OK, I was waiting for the sentiment numbers and I just got the delayed release. They are up 1.9% from last week and still in a fairly good range. Here is how it has gone over the last 5 weeks. We hit a market extreme at 29% bullish 5 weeks ago. That is a screaming buy signal for a move in the opposite direction. (trigger points 35% or less bullish and 55% or more bearish). This works in the opposite direction. So five weeks ago, the sentiment from the professional newsletter writers was only 29%.   I was screaming it for days before the move. Well, we are up 100 S&P points from then and at a major wall.

Back to the numbers; the last five weeks are as follows, 29% , 33.3%, 36.7%, 41.4% and today 43.3%.  That is not even in the middle of the range and has to be viewed as still showing some degree of strength.

One scenario would be, if we do move back down to the middle of the range, those numbers will again come off and get into another market extreme. The market sentiment will again shift to a minority position of bullishness and we could then have another large rally getting over this very large current resistance point.

I will likely know which way it is all going to go in the morning, Fridays new session. If nothing happens, we may have to wait until Monday, but we at least know exactly where we are and where the market is likely to go once it tips its hand, well that is how I see it.

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In today’s trading I took a few good trades and made up for yesterdays non performance. An equity trade chart below shows my results. Traded just 3 and then 2 contracts, but had a pretty good day. I missed all the move up and down as I came in as the market was finding its daily bottom. Just scalped my through the mess and was quiet satisfied. Looking forward to tomorrows session.

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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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Market Reversal – Just as called in Yesterdays Posting

Monday, June 21st, 2010

Hello, this is Vince and today is June 21st, moving right into summer, very welcomed on my side.

With summer, is a time of change, transition and new ventures. I know that in the Marble Mountain Wilderness of where I live in Northern California, it is a time of exploring new trails, unseen alpine lakes and new adventures of which I live every year. I never tire of this outdoor life, as I can always balance it, with city interaction of which I often do.

Transition and change is apart of life. New growth and plant life constantly springs up before my eyes. This is the same growth that I see in some of my students. It is a pure joy to know that there are real people on the other end of my trading method whose lives are being changed for the better. This is my dream and I am living it. To give back to others and allow them to live there trading dream is what does it for me. I don’t look to and on myself here, because I have all I need.

In today’s trading, we did see the target area hit that I talked about over a week ago and updated in yesterday afternoons blog post. The minimum target was 1122 and the average target area was 1132. Today we hit just under 1130 in the S&P emini futures and satisfied that target area goal.

The second part of that was the underlined portioned of yesterdays update, calling for a reversal of the upmove under way in the premarket. I did give myself a small out, by allowing for the completion of this reversal to come in on Tuesday, but the emphasis was on Mondays gap move higher. We were up over 150 points on the Dow and equivalent amounts on the S&P and NASDAQ,  only to pull back to end the day down across the board.

That is what you would call a reversal day. Move out substantially higher and end the day down. That does not happen that often and for me to call that one again, there has to more to the markets than just “random theory” as many try and identify the markets as.

This is part of the language that I have often mentioned, when reading the markets. Either you know it or you don’t. If you don’t and want to learn, you will have to take a concrete action to change that which you do not know. It will not come to you in a dream or by accident. It will come with purpose and clarity. “If you call it, it will come”.  I borrow that line, but changed it a bit to make a point.

If you call Sniper Day Trading, you will see it now and be able to apply it to current price action that takes place each day. If you are not interested in being profitable on almost every trading session, that is OK, that is your choice. If, on the other hand it is something that you dream of, then take a step in the right direction to make it a reality.

I don’t need to or have too try and convince those who want to see change to do so. Either you want results and a solid foundation to build upon or “you can try and figure it out on your own”.

That is what I did and it took umpteen years ( a long time).  I made up a new word, I think. O’ well. I have something to offer, for those who are searching. If you think you have what it takes to make it, God Bless you and I wish you all well, really. If you have questions and want to bounce a few idea’s off of me, I am game. (email me) I do want to help. My answers will be somewhat limited, but surprise me and who knows what I may tell.

But for those who want to know the “whole story”, don’t ride the fence to long. I don’t charge to much when compared to others, but think that I am affordable enough for most traders to build there foundation upon.

I truly believe you will not be sorry. I have the time right now. I am coming off of some training that I have recently done and do have time to pour into a few more students who are interested in becoming profitable on a regular basis.

Its not all about the money, but I do expect to be paid for my knowledge and expertise in this area.

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I posted a chart of today’s trades above and had a pretty good day. With the Nasdaq trades I took, it was around 1K.   I would consider that a good day. I only had a 2 tick loss on one trade today in the S&P as shown above. The trade indicators are working as they always do, because the market always trades in the same fashion one way or another, choppy or trending. I have tools and screens for both, but my T-2 screen will do the job for both if you want to camp on this one trade screen setup. We do have and use higher time frames that are synergistic in nature,  to give us clarity in direction, all apart of the trading method.

Good Trading to everyone who follows me and my blog. If you need help, whether it is a question or you want to ask for my free branded book on, “The Power Of Concentration”, just ask, its free and I won’t be hounding you to sign up for this or that. This e-book can really help those who apply it wisdom to there trading, to better focus on there objectives, profitability, (a key for most).

Until next time, Vince over and out.

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Reversal Day on Wall Street – right on schedule

Sunday, February 7th, 2010

Hello, today is Saturday February 6th and this post is for Fridays session, what a reversal !

Reversal Day on Wall Street right on schedule, is todays blog title. The Dow was down 167 points at its worst point and ended the day up +10. The S&P did something similar, down over 20 points and close up 3 points on the cash market.

It was good to see a little buying come in, to keep the bears on their toes. Wall Street is always a two-way street, don’t forget that. If you had it in your mind that today was a down day all day, you were wrong, it happens. The point is, don’t let your guard down. This is exactly why you get days like this. The majority of traders gets locked into thinking one way. When things start going against that, at first they rationalize, then they try to talk it back down, then they start praying, and then its to late and they through in the towel and buy back there short positions.

Those short early on, gave back all the gains they thought they had and then some. It is not a good weekend for those caught in that on Friday. There were clues, that today was a reversal day. Early on there was some fast looking action, but some real nice turns going on in the S&P futures.

I started my day again in the afternoon session, around 11 am West Coast. The day went pretty well. I was able to pick up some large moves, for me anyway. I stayed in and did not scale out like I usually do, because I saw what was coming. One of the trades was for 8.50 points average and a few others for several points more. I have a video of it below, if you care to see. It wasn’t perfect, but trading never is, close enough.

I did say the day before, that it was more likely that a spick down would happen first before a big bounce, than holding the line and attempting to rally. We now might see that 1080 hear pretty soon. The market did go a little farther down than I thought it might, but that is not unusual, if a reversal was in the mix.

We closed at the highs of the day and even posted gains across the board in the Major Market Index’s.

I will be slipping a post for tomorrow about the benefits of using Tick Charts over Minute Charts. So come back for that one, it will be up mid day West Coast time.

Enjoy the rest of the week-end,Super Bowl Sunday tomorrow.

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Can you say “REVERSAL DAY”

Tuesday, October 27th, 2009

Today is Monday, October 26th and the markets took investors for quite a ride today.

Yesterdays blog, I stated that it appeared that we had broken the down-trend late in Fridays trading and a move back up to the 1086 + level was likely. That is exactly what happened in this mornings session. Here is the quote from yesterday.

It looks like the down-trend has been broken but we really still need to get over the last minor pivot high at 1080.50 . Once that is taken out we will have a good chance to get back up to 1086 + in quick fashion.

Well, the break came on the open, in quick fashion, I might add and did shoot up to 1086 +, with the plus being another 5 points for a total of about 12 points in the first 35 minutes. This is from the cash S&P.

The next move after that came at 7:37 & 8:14 am, West Coast time. The move at 8:14 was real nice. It cut right through all the stops from the mornings open like a hot knife through butter and kept on going to take out the critical support I mentioned from Thursdays pivot low. In the S&P E-Mini’s, it broke about 9 points past the low, before it pulled up to take a breath. Over the last 5 trading days, the momentum in the hourly cash S&P market has been in a down-trend and still is as of now.

Today we saw a 27 S&P point swing from high to low, that is a lot. Currently the cash S&P support is about 7 points lower from its current level. The next support comes in at around 1045-46. The short-term momentum is pointing to the downside but the daily and weekly is still up. This is where you have opposing forces at work from different time frames. Who will win the battle. You really need to let the market decide this one  and go along for the ride.

http://www.screencast.com/t/lAkJmeVoGY4z     a couple of trades I took towards the end of the day.

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Trading is not always easy

Friday, May 8th, 2009

Today is Thursday, May 7th and the markets put in a reversal day today.

I could have been only a day early, but with today’s action the market pushed higher on the open and formed a real nice triangle formation on the larger time frame charts, then broke down to first fill the higher gap open that we put in. Then, continued to trade down for the rest of the session.

Today, really looks like a reversal day and this may be all this rally has. When you see the markets push up early in the session and later close at their lows for the day, that is not a good sign. This is the first day of price action that we have had that meets this description. This long move has not put in a session like this in 42 trading days.

I don’t know what the internals are, ADV/DEC, but I would bet that today it was real bad. Yesterday’s session looked to have some solid resistance, at the high end of the upper blue line that I drew on the daily chart and with a move slightly past that, THEY drew traders and investors into the web, only to take it down pretty hard. That is the kind of price action you see at market tops. This may only be a short term market top, we don’t know what is going to happen as the pullback takes hold.

Let me remind everyone, that we are still in the up-trend and technically no real damage has taken place. We will have to break the lower blue trend line that I drew on the daily chart, that would violate the uptrend and get things going to the downside. Or it should. The market may buy itself some time and move to the right so that it will have a chance to touch the outside purple line, going back about a year. It is all real close.

Originally I saw the top at 940, but I gave it a little extra room to the upside to get people to bite. It may be that with today’s price action, that may have happened and the short term top may be in. Just watch price action and the key support levels that I mentioned as your clue, but I am getting the feeling we could see more selling soon.

Today’s trading turned out OK in the end, but it was a bit rough. Nothing like yesterday. Difficult days are going to happen, that is just how it is and I realize that. I do have my mental safety net, of no greater of a loss than double my daily goal. My daily goal has been $500 dollars, but I most often trade to double that or more. So my maximum daily loss can be no more than $1,000 before commission cost. I got down to $-800 which is about 3 stops of 1 point each. I had a few gains in there at first, then had a downdraft, follow by a recovery, and one more downdraft, before I saw the light again. I ended up a little over double daily goal in the end.

Trading is not always easy, but it can be very rewarding to those who are committed to the process. Nothing in life is worth while is ever easy. It takes work and dedication. I believe, if someone wants to be a successful trader bad enough, it can be attained. Each individual is different and there are no two traders alike. But there are skills that can be learned and applied, to bring about consistent returns. We need to pursue those skills, they are not going to come to you by accident or mistake, but with purpose.

What ever you do, continue to add to your knowledge and stay humble. Never take the attitude, that you have got this thing licked. There is always something else to learn and experience, keep moving forward and strive to be the best that you can. You may not be the best in the field, but you can strive for your personal best. As I mentioned yesterday, confidence comes from repetition of consistent successful actions, done over and over. You need to want it. If you do find it, you can be richly rewarded.

http://www.screencast.com/t/x9KFNYyDqjm Today’s equity chart

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