Today, the S&P 500 closed
below the key support level of 741. This level was the lowest point that
the S&P 500 had been since 1996, which we had tested this past
November. This week we closed at 743 on Monday, testing the 741
level. Again on Tuesday we opened at 744, only to rally and close at
773. Today we opened at 750 and ended up closing at 735.09, only .60 from
the low of the day.
What is the significance of this? Closing only 6 points from a key support level doesn't quite qualify as
breaking through support, yet we are teetering on the point of no return.
Using a price chart from Yahoo Finance, I looked back as far I could on the
S&P 500 trying to gauge our next support level. I have to warn you,
it isn't pretty. If we break this current level, there is a very good chance
we will see 450!!! I'm not saying that we will hit that level; I am
saying if we break down from here, 450 is the next visible support level on a
59 year price chart.
Thankfully we have Wizetrade, WTV and all the
support and training that comes with Wizetrade to help guide us through these
turbulent times! Next week could be the make it or break it week for the stock market!! I will
be holding my breath until then!!! Not really, but I will be anxiously waiting to see what next week will bring us!!!!
We are up 128 points as i speak and evryones looking to go long this market. Its funny how one or two days get people in the mood to go long. If you look at the DOW you can see we have lost 1200 points in the last 3 to 4 weeks. So one or two up days dont make a trend reversal. Sometimes you just have to look at the bigger picture which is the charts, the charts dont lie. Remember this is real time live in the market trend recognition software, so until the longer term trends go green with some angle and separation, continue to think short. Lets not try to call a bottom, we have seen what happens everytime someone says this is the bottom, we make new lows and the trends push lower. Follow the lights, you may think that $2.00 stock looks good at this price, but whats the problem at buying it at $4 or $5 when the trends are green. Right now if your buying stocks because they are cheap, good luck... Remember those $4 and $5 stocks that looked like they were good opportunity, they are now $1 and $2 stocks. Ask Merrell Lynch and Bear Stearns how low a stock can go. Good luck and happy trading.
As we all know, trading requires patience, discipline, focus and a plan. We can pick stocks with the strongest trends, we can go in the right direction of the market and yet we are sometimes still off on our timing. You see, the market has a life of its own. It is a living, breathing organism that moves at its own will.
It is our goal to find the best possible trade opportunities and build a plan around that trade. What I mean is that you should set a realistic stop loss as well as a profit goal that is achievable and believable! Most importantly you should be using a risk-to-reward ratio that will assure that you are always winning more than you are losing!
Once you are in the trade you are at the mercy of the market. You will win some and loss some, but hopefully your money management keeps you ahead of the curve. Today happened to be a very choppy trading day. This morning we issued an active short alert on TGT that worked out beautifully. After we issued the alert, TGT moved over $1.00 in our favor. This afternoon we issued another active short alert on WLL. Unfortunately WLL broke above our threshold by about $0.09 and the proceeded to move nearly $1.00 in our direction. I would venture to guess that some of you hung tight and probably made money and some took the loss as it broke the high of the day.
The important point I want to make is that sometimes we will nail a trade and sometimes we are just a little off. Don't beat yourself up over a loser. Trading is a marathon, not a sprint. Make sure you are always booking more profits than losses and you will always be winner!!!
February 24th, 2009
NickP
Call this a tip of the day..but if your running CNBC, Web news sources, Guru's message board sources, streaming news sources and watching hours upon hours of post market commentary across 5 different news channels every night..in an attempt to make any sense of this markets moves, I suggest you turn them all off and focus on the very basics of the program. In this environment, less is more. Stick to the charts and the stocks that will shine going forward, they will show their faces now and in the future!
Nick Pirraglia.
Everyone was calling a new bottom last week and talking about the last time we made new bottoms and how we rallied up from there. Well it didnt happen this time, and this time we made made new lows not reached since 1997. When they were calling the bottom i was looking at the Wizetrade charts and seeing some extreme red chart on the DOW and the S and P. We did move higher the next day and then everything melted down. When the charts look as strong as they do, i dont want to be the one stepping in front of that train trying to stop it. Watch your charts and believe in your charts, but use money management.
The DOW blew through 7500 without a tought & closed today at less than 7250 with no problem. What is next? 7000 here we come. When I talked about the DOW at 6500 several weeks ago was I too optimistic?
The Dow Jones Industrial Average closed down 100.28 today at 7365.67,
breaking the 7449 key support level from November 2008. On a positive
note, the Dow managed to rally back more than 100 points from the
lowest levels of the day and the S&P 500 has yet to break the
November 2008 lows of 741. The S&P 500 ended the day down 8.89 to
close at 770.05 and the Nasdaq managed to close down 1.59 at 1441.23.
If you look at the charts of the DJIA ($INDU) you will notice the long
term trend now has extreme strength and the mid term trend has rolled
over with increasing angle and separation. If this is a sign of things
to come, then Dow 6000's may be a reality!!
Dow Jones Industrial Average Long Term Trend
Dow Jones Industrial Average Mid Term Trend
I have
been scanning the markets and really haven't found anything compelling
to trade this afternoon. With the markets trying to find direction AND options
expiring today, I sometimes find it better to just sit on my hands and
not trade. Since I am $14 away from hitting my daily goal, there is no
reason to take any more chances this afternoon. Use your best
judgement, but don't risk too much!!!!
Looks like another flat day in the market, yesterdays chop has moved into todays trading. Yesterday we were up and then down and up angain and then down, that seems to be whats happening again today. The futures pointed up over 100 points this morning before the bell rang. Now that the market is opened we have erased those gains and we have been chopping around flat all morning. Where do we go from here? It's like the calm before the storm, whats going to happen next? Right now gold and mining stocks are making the move due to the flight to safety in the market. Just pay attention to what your trading, i know we trade the charts but the last thing you want to do is load up on a bunch of gold and mining stocks and gold has a correction. It could hurt, so pay attention to what your in.
Where do we go from here? Lots of people are talking about a bounce off of these lows. Will we bounce or is this just a pause before a bigger fall? Looking at the DOW and the S and P we broke short term support and we are a couple of hundred points off the lows set at the end of November. So the up side doesnt look so good right now unless your taking some risk and think we have found a bottom again. I would be sure to keep an eye on the charts and have a exit strategy if you are long, because if we break down below 7400 on the DOW its going to get ugly quick.
