Posts Tagged ‘unemployment’

Unemployment Numbers to be released Friday

Thursday, June 3rd, 2010

Today is Thursday and general market was up slightly with a strong finish into the close.

The S&P, Dow and NASDAQ markets were all up slightly at the close with a strong come back from earlier session losses. I believe there are unemployment numbers coming out tomorrow and it is expected to be an important figure which will propel the market big one way or another.

I did not hear the speech, but someone said that the President was speaking and made a comment about great unemployment results to come. He seemed to be upbeat about the news tomorrow. Well, let me remind you of a time that he addressed the markets before. It was two days before we hit the S&P 500 low of 666 on March 6th or 3/6.

The point is, two days before the market hit that bottom. I did hear a speech by the President that was so very upbeat and encouraging. He basically said, the stock market is a great buy, but not in those words. I had never remembered a previous president doing that, but it may have happened. Again, back to the point. Two days after that speech, the stock market shot up over 400 hundred points on the Dow and it has not looked back since.

Now, I had heard of a very upbeat speech that was given today about unemployment and that you can expect this and that. Well, he seems to have pretty good timing in the past, is he going to go two for two, maybe ?

The market is in a position to rally, but there is one thing I would have liked to have seen today that did not happen. I was hoping for lower numbers on the bullish sentiment that was released this week. It came in basically the same, around 39% bullish. That is not really good enough to get the call the I was looking for, but that does not mean we can not rally. Many times the numbers will push back and forth in the middle as a fight is taken place between the bulls and bears. Its just that when you get extremes, we often see bigger more predictable moves. OK, enough on that.

In today’s trading, I was trading very small, just 1-2 contracts. I was coming off a few days of very big gains and moved my contract size down to insulate myself. It did not change anything, as I still traded well and hit more than my daily goal. I probably traded for about 8 S&P points of total profit. Much more than the 2-4 points I shoot for on just a regular day.

There are times through out the week and month that I have been pushing it and I have done very well. I usually don’t like to trade for a long time. I know that it is often times best to get in and get out. If you have good profit for the day, book it. Go do something else or enjoy some of the freedom that trading offers you. Many traders will say, that they like the idea of being a trader, because it will afford them more time freedom. That can be true but only if you exercise it. Taking time away from the markets can give you a fresh perspective. If you trade all day, every day, you will get tired and burned out which can produce mistakes. You need to be fresh and on high alert. It is to easy to place trades out of boredom as the action slows down, so be careful of that.

As I say that, there is a place and time for study. It is important to get screen time in if you are new to trading. It has been said, that good trading is more like an art. That can be true, but you can learn this art or trading by exposing yourself to market data. I feel, every serious trader needs to keep learning and one way to do that is, by looking at past data and becoming exposed to different setups, reads, looks and situations. You can still do this while the markets are closed as you go over past data. There is a value to it, even if some think not.

Seeing how the market reacts in certain price action setups is important. You need to put your mind inside the price and feel the moves and try and experience what other traders may have been feeling for them to push the market up or down as you see it unfold. Again, this is past data and it does help. Looking now at live data is different, but if you remember what setups you seen that worked out before, you will over time, be able to identify them as live data unfolds or that is what you need to strive for. History repeats itself and that sure is true in the trading markets. Find the history of the past and apply it to the future. You will be glad you did as that is what will turn out a winning day, week, month and year.

Good Trading to all

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Fractal Nature of the Stock Market

Wednesday, March 31st, 2010

Today is Wednesday March 31st and the market bounced off some key support today, 1162, two times.

The S&P market is holding in there. It does not want to go down and not able to move up, for some time now. A big report is coming out on Friday, the unemployment numbers. The last report was the first decrease in unemployment since the recession started and a back to back positive reading is going to send a strong message to Wall Street. There are many traders and investors thinking only one way. That this market was going to go down. That is having tunnel vision and not usually a good idea. You need to stay open to direction and then interpret the price action to properly trade this market.

I know there are traders who are adamant about this market falling and they may be right, but it has made virtually a complete come back from the drop earlier in the year. If the unemployment numbers are good, it may spark a big rally just be ready either way.

The trend is up and holding, but five trading days ago, we traded at 1177 to the next days low of 1157 and we are currently at 1167, right in the middle. We have bounced up and down inside this range for the last 5 days. That is why yesterday I said that we will probably see inside action over the next day or two, “Containment”. This containment is only adding to the fuel that will be expelled once the market gives way outside of this consolidating range. I will show a chart of it tomorrow and explain a thing or two about it, so be sure to come back and get some insight as to the next big move.

In today’s trading I took 8 or 9 trades and did pretty well. I only had two small losses for a few ticks, the rest gains. I scaled out of the early trades and took an all in, all out approach for the last bunch. equity chart below.

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I have been talking in between various topic’s, like trading within your dominant trading personality. If you trade stocks and look at 15 bar charts, your pool or available trades are going to be limited, but your rewards are going to be much bigger than someone trading 5 or 1 minute bars. Your stops are going to automatically be larger based on your time frame, but everything about trading is still the same and is relative to the time frame you are trading.

That is because the stock market is fractal in nature. Some may not know what that means so I will explain. If you trade daily charts and follow a set trading method, you will have to wait for days as the bars line up to a desired formation or condition as per your method or system. Again, your rewards will be much greater than someone trading hourly bars, but your risk will be greater as well. The stock market shows consistent patterns inside of every time frame and can virtually be traded exactly the same in any time frame producing the same type of results, but with relative returns. I have an example of this fractal nature found in nature itself below.

This is the reason why it is important to trade within the time frame that best serves you and your personality and situation. With the leverage available through trading futures contracts, a trader does not have to trade for very large moves to make a good daily return, but he needs to be able to keep risks small and exploit market moves as they are given to him. Just as the price moves are relative to the time frame you trade, the returns are as well relative. By using leverage in the market you magnify your moves, positively and negatively or you could say, for you or against you.

It has been said, that the smaller the time frame you trade the harder it is. Now, why do you think that is?  I think the reason is, traders are not conditioned enough to react as new patterns are presented to them. They are pron to make more mistakes and to over-trade. What can be done to change this. Practice and get the conditioning you need by knowing what to do and when to do it. Get the knowledge you need to exploit these price imbalances and live your dreams of trading for a living. There is rarely any way around paying your dues if you are going to attain this goal. Many forgo training and leave there results to a combination of idea’s, but never having a complete trading method, and road map to follow. If you are going to trade, you need knowledge and support.

If you become proactive in learning how to trade, you can trade stocks, commodities, forex or any trade-able investment instrument and speed up your learning by trading the smaller time frames. You will be forces to interpret the price action and follow what ever indicators you have if any, to gain the trading edge.  After doing this, you will see that when you go back to higher time frame instruments, you will see, feel and know so much more than when you traded daily, hourly or 15 minute bar charts. In addition, you may find that this smaller time frame type trading is what you are best suited for all along. That is how it was for me, but it took years to figure it out on my own. I am just presenting the idea’s to those who have not thought about it.

Consider it a training boot camp as you get dozens of market conditions reads per session, capturing the trading edge.

Give it some thought, trade on and trade safe.               Video of today’s turning points using tick charts, take a look.

http://www.screencast.com/t/NGJlNTJi                     Equity chart of today’s trades

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Stock Market Showing Weakness before Unemployment Numbers

Thursday, December 3rd, 2009

Today is Thursday, December 3rd and the markets are now starting to show its hand.

It seems pretty clear now, that the market is ready for a pull back. Over the next few days, I would expect the market to pull back to support, around 1077.  At that point, we will have to see, but the short-term momentum is down. I believe there is important unemployment numbers coming out tomorrow. I don’t know how or what that is going to do to the current momentum, but I would suspect that it isn’t going to change anything much, still down.

The daily charts on the Dow and S&P have been broadening, as I mentioned lately. It is getting strung out with a slight upwards bias, but that appears to be changing at least for now. Early in today’s session, we hit a new high in the index and backed off from there. We did close at the low of the day, which is really a bad sign. We will just wait and see how it plays out, but this is just what I am seeing.

On the sentiment front, I was waiting for the new numbers to come out and today they did. The bearish percent dropped again, by 1% to now 16%. That is low, very low. It has not been at that low of a level in the past 5 years or longer, I can only see the last 5 years. The bullish sentiment went down a little, from 50.6% to 50%.  We will just keep watching the bullish sentiment for changes.

With all that being said, the market can make its move down now if it wants to. You never want to place overly strict conditions on market flow. Reading the price action is the key and will always remain that way. Identifying sentiment conditions only gives occasional insight into major market moves, it is not full proof, but it has shown itself to be very accurate for the over 20 years I have been following it.

In todays trading I started trading again during the slow period of the day. That would not have been really to bad in and of itself, since that seems to be when I start most days, but I was feeling sick today. That was not fun. I should have taken the day off, but I didn’t. I hate getting the first trade of the day wrong, but that was how it went. I saw a move short that I was sure was going to pop, but I could not get into it fast enough and it threw my timing off. I did recover with a nice 7 tick trade a moment later, after that the market just stopped. It took forever to move a couple of ticks. I remember one small little momentum move took 30 minutes and it only moved a few ticks. I was dieing there, waiting through all of that and not feeling good to boot.

When I looked at all the real nice moves from the early morning trading I felt worse. If I would be trading the open, I would quickly have gotten my goal and could have ended it. When I feel better, I will be trading the early morning open, thats it. I have been trading OK, but it has been more work and taking longer because of when I start trading and am limiting myself because the moves are just not their.

The smart thing is to trade the open and take off the rest of the day, like everyone else. Enough about that.

I am going to have to end it here for today. Below is a video of my trades for the day.  

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Opportunity to Beat Wall Street

Friday, June 12th, 2009

Today is Thursday, June 11th and the market is still at it, marking time by moving sideways.

It wants to go down, but there always seems to be a rally bringing it back up. Go figure. Well, that is what we figured, for about the last week now and we continue to see more of the same. Yesterday’s market did the exact same thing as well.

It is becoming a ritual. Things will change as time is allowed to pass. This is the same thing as a pull back, but you are getting the rotation while prices are in a stable range. This does not happen too often, but I have seen it before. Investors, Mutual Funds, Pension Managers are all rotating through their holdings. When one group wants to get out, you have another group ready to step in and take the bid, so prices are not dropping like you would think after such a big move up.

At this point, it would appear that any sell off is going to be short lived. There seems to be a concerted effort to keep prices up, creating the impression of a full economic recovery. The markets always look 6 to 9 months out and if it sees better days down the road, even if those days are not here, it will bid the market up. That is part of the reason I think we will see higher or sustained prices until late September/October.

Today’s trading went well as did yesterday’s. I think yesterday’s was a little better than double daily goal and today a little above daily goal. Today I had no losses, hurray. My first trade was a gainer and the rest followed, 6 total trades, one break even and the rest gains. I had computer problems this morning, but I think I have it worked out. Bought a new external hard drive, took all of my training video’s off the computer and cleaned things up a bit. I should be OK now.

Well, I just had a thought, I remember what I had said some time back about the whole flu thing. I had said that it was coming back to visit us and that it was going to be a problem for corporate profits. That was over a month ago. Today, we see the first stages of my prediction coming to pass. The W.H.O. has declared pandemic level 6, something that has not happened in over 40 years.

What is the implications of this on the stock market?  I will recap and update based upon what I think. Whatever the real problem, it looks like it will get a lot of press and with it will come the impetus for getting the population vaccinated. It has been previously proposed, companies that have about 50 employees or more will have appointed a full time person to monitor the health of individuals within the company, (an additional expense as well). Key people could be required or forced to remain home and get vaccinated.

There is a lot of controversy over this and only 30% of the people say that they will be willing to do this. Bottom line is, it is going to hurt corporate profits and Wall Street will ferret this out, project it onto future earnings and the market will again make a large adjustment down. It is not going to be a real big problem until official flu season, around October.

There are about 3 maybe 4 other things not related to the above that will potentially add to downward price pressure, a cocktail of events. A declining dollar, increasing interest rates, increasing unemployment and a new wave of foreclosures to the middle of the market, which is a larger segment of mortgages written. If you throw in problems with North Korea and Iran you have a whole smorgasbord of events that may be just too much for the markets to bear. I may write more about this  in a future post, so stay tuned.

I have learned that in order to be a most excellent trader, you have to look beyond the obvious. If you only see what is in front of you and are not able to ask what if questions, you will not know how or what to do until it is too late and your account is under water.

That applies to trading, but it also applies to things in the world which affect companies, employment, innovation and our future. You need to look and think ahead and always allow for the impossible. No surprises. If you look at the market through the thoughts and ideas of only yourself, your vision will be limited and so will the possibilities of a super-sized trading account with steady profits.

The people you trade against are not going to be willing to cue you in on all the real happenings, so try and learn to think for yourself and question things. That could apply to market direction as well as many other areas. I am weaving two kinds of thoughts into one, but they are really only one thought applied to different areas, same reasoning, but nonetheless all related. Unless you are different, you will be ordinary.

That is what Wall Street wants to trade up against, a group of ordinary investor/traders. They seem to do very well against this group and they don’t want anything to change. So if your plans are to the contrary, then you need to get busy and educated. I can tell you from personal experience that if you try and learn how to trade only on your own, like I did, it is going to take you a long long time to figure it all out, many years and you may still never get it. Just ask yourself this question, do you have the time to wait that long?

I think not. If I am right in my assessment of increased volatilty later this year, do you want to be able to capture some of those massive market moves, or will you be paralyzed with fear, not knowing what to do as the market takes off without you and potential profits Just think about it.

I have and that is why I will be gearing up big time, preparing new strategies for those explosive moves. The work starts now, going over how to limit risk and exposure while maxamizing huge total dollar returns. If anyone is interested in preparing now for what will be needed later to address the increased volatility that is sure to come, send me an email and I will give you more information on how you can be ready and what strategies you will need to implement.

http://www.screencast.com/t/JGm4fbZJx Yesterday’s equity chart

http://www.screencast.com/t/t8g1zR3fR 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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