After yesterdays sell off we are up on the day today.... so far. Right now the DOW is up 67 points and the NASDAQ up 6 holding on to the opening bell gains. Even though the market is up, I am looking at a lot of stocks that are down on the day. I have been watching a handful of stocks and they are all down on the day. Most are retail stocks like BIG, TJX, ROST and with consumer confidence bouncing off all time lows last month i was thinking we might see a rally in this sector. Everything popped at the open and then quickly sold off. As i am writing this they are starting to fill the move to the down side, right now ROST is only down .73 cents after being down over a $1.15 this morning. Looks like active trading off the bottom instead of the swing i was looking for. I guess we will see what happens the rest of the day with this crazy market. If you look at the 130 minute light you can see how we chopped around for a couple of days and then they slammed the market down on us yesterday. So we have some ground to make up, but look at the previous lows on the DOW as resistance now and we need to break above the highs of last week to get the mid term on the DOW to shape up. Right now it looks like it could fail and pull back on us for a week or so.
Happy Trading......
Big sell off in the market this afternoon with GM fueling the fire. Looking at the mid term chart on DIA (the Dow) you can see some nice patterns in the charts. We could be developing a fresh cross to the down side on this chart, but right now the up trend is slowing down and pushing the green line into the red line. What does this mean? This means we could see some selling pressure over the next several days if not weeks. This just means if your long the market, tighten your stops, lock in profits....Trade your plan. Looking at the short term chart on the DIAMONDS (DIA) you can see todays sell off is on increasing volume. But looking at the bigger picture on the short term chart (last 22 days) and i think i have mentioned this before, the last 13 days (basically the rally we've had) have been on lighter volume. You can see this pattern on the short term chart and the mid term chart. So i dont think the buyers have commited themselves to a full blown trend reversal. This week should be an important week for the traders that are long this market right now, just in the terms of are we moving higher or lower. How big of a pull back is this? Is it a couple weeks or just a couple of days? Lets keep our eyes on the charts and see what the next couple of days brings us, hopefully we find a base and move higher from here..,
Happy Trading.....
A couple of weeks ago, Derek, Blake and I did some research on bear market rallies. All 3 major indexes had just bounced off of their lows and we wanted to get an idea of how much the markets could move up if this was a true bear market rally. Through our research we found out that the average bear market rally moved up about 25% from the lows. The low on the S&P 500 was 666.79 on 03/06/09. If you take that number and multiply it by 1.25 you get 833.49. The high today on the S&P 500 was 832.98. The low on the Nasdaq was 1265.52 on 03/09/09. If you multiply that number by 1.25 you get 1581.90. The intra-day high today on the Nasdaq was 1582.23, although the close was 1587.00 due to orders still going through after 4:00 EST. The Dow Jones Industrial Average still has about 160 points to go until it reaches a 25% move up from the 6469.95 low. The Dow would need to hit 8087.44. Obviously these numbers are never exact.
What does this mean to you and me? In my opinion it means that I would start to tighten up my stop loss orders on any long positions that I was in. I would not be looking to take any big new positions long at these levels. I’m not saying that I wouldn’t be going long; I am just saying that I would be taking any large positions. I would try to be nimble over the next few days or weeks, looking to confirm if history repeats itself. We still need to trust what we see in the charts and the long term trends of all the major indices still show an overall bearish trend.
Here we go again, another roller coaster ride in the markets!! This morning we watched the Dow Jones Industrial Average rally up 200 points, only to turn around reverse 300 points from the high of the day. We then saw the Dow rally back 200 points in the last 50 minutes of trading to close the day up 89.60 at 7749.81. The S&P 500 rallied back nearly 25 points from the low today to close at 813.88, up 7.63 points. And the NASDAQ gained 12.43 points, to close at 1218.95.
Lets talk about cycles and patterns. The market has gone up for the past 3 weeks and we are looking at a big sell off today. We were up over 200 points this morning and now we are down 75 points. Talk about profit taking. If you look at charts and the patterns within those charts you could see that a pull back is needed. Like i said before we have moved higher over the last 3 weeks, and it was a good move to the upside too. But just like daily trends that move up for 3 to 4 days, its the same with the weekly and longer term trends. They tend to move up for 2-3 weeks at a time and 2-3 months for the longer term trends. These are the cycles of buying and selling. So this pull back is needed for us to move higher, if we are going to move higher. Some people called this a short term rally before a bigger move down, remember we had dropped over 1000 points before we hit this current bottom so i bounce was needed, the market was over sold. Maybe now is the time to lock in those long side profits...... Plan your trade, trade your plan...
The market is making a run today. As i write this the market is up 265 points and I am looking at a lot of green stocks. Is this the bottom? I would call this a much needed bounce. We made new lows 10 days ago and this is the knee jerk reaction that follows. If you are long this market, just have a plan in place if we see some profit taking. Remember the market has cycles of buying and selling, right now the buyers are in place and pushing the market higher. If any and i mean any bad news comes out this market can fall faster than it went up. Thats what happens, things tend to fall faster than they go up. Be the wizetrader and have a trading plan to protect your profits.
I’m currently using a strategy I created for CT that, every once in a while, is extremely good at finding up trends developing on all three major Wizeman. I simply look for the Month, Week and Day showing a fresh cross (green) at the same time. It's a very simple set of rules to create and automate. The strategy is designed to run on a basket of stocks when you’re in a large % of cash in your account.
I'm currently in:
ADM from 28.04 : trigger date 3/12.
HP from 22.81 : trigger date 3/12. Target hit and trailing.
JCG from 10.89: trigger date 3/12. Target hit and trailing.
The exits I use are based on % of the ATR. The strategy is on the Web community under NickP. Check it out and READ the descriptions.
On WT/ Wizefinder, simply set up a scan for the 3FWM as a fresh cross and do some chart reading for the best ones. For Options players, use Options Hunter in the same way and go out to at least 4 months.
Nick p.
Big Ben saves the day!!!
The U.S.
equities markets rallied on the news that the F.O.M.C. will hold the Fed Funds
Rate steady at 0% to ¼%. More
importantly, the Fed also announced that they would buy up to $300B in long
term treasury notes and $750B in agency mortgage-backed securities. The Dow Jones Industrial Average gained 90.88
points, to close at 7486.58. The S&P
500 tacked on 16.23 points, to close at 794.35.
So far the S&P 500 has moved up 127 points or nearly 20% from the 666.79
low on March 6, 2009. The NASDAQ picked
up 29.11 points, to close at 1491.22.
The U.S.
equities markets staged an impressive end-of-the-day rally today, with all of
the major indexes closing at the high of the day and above the highs from
yesterday. The Dow Jones Industrial
Average gained 178.73 points, to close at 7395.70, or 3 points above Mondays
high. The S&P 500 tacked on 24.23
points, to close at 778.12, or 3 ½ points above yesterdays close. So far the S&P 500 has moved up 112
points from the low on March 6, 2009. The
NASDAQ was again the biggest percentage gainer today, adding 58.09 points or
4%, to close at 1462.11, 17 points above yesterdays high.
This is the 5th day the market has moved higher, but what else did you expect. Looking at the mid term chart on the Diamonds (DIA) we went from 8200 to 6400 in 4 weeks. So a bounce is to be expected. This is hurting some folks that are short this market right now. So if you are in this position, there are a couple things you can do. I talked about tightening up stops last week because the mid on the DOW was converging and you could see the reversal coming. Now this has to come down to individual trading styles. If you are swing trader you have probably been stopped out and moved on to your next setup. Your day has gone green over and up which is your exit signal for a swing trade. If you are a longer term intermediate trader your mid term trends have turned green but they are not fully committed to the upside. This is your signal to start thinking about taking your profit or protecting your profit by tightening your stops. Now if you are a longer term position trader and have a nice profit in your positions, this may not affect you at all. This is just consolidation before the next big move down. But if you are a position trader and you just got into your positions, this can hurt and this is where a solid trading plan comes into play. What your plan is going to do is take the emotions out of that trade that you may be feeling right now. Because you’re trading plan tells you where your stop is and if you get stopped out, your plan still worked the way it was supposed to. These markets can be tough, and here recently we have seen people selling snake oil. Can you imagine how those people felt who trusted Bernard Madoff, to put their money and their trust with one individual? Or how about everyone who is watching Jim Cramer and CNBC, they are always on the verge of cutting edge business news. You would’ve thought they might have seen this coming. But no, they had CEO’s of homebuilders saying the downturn in the housing market is coming to an end. Bank CEO’s telling everyone they are ok and have plenty of money to move forward. You have made the choice to buy our software; you have made a choice to take control of your financial future in a number of different markets. When Cramer was saying I would buy Bear Stearns at $60.00 our software was showing the stock was moving lower. And it went lower, much lower. Can you say out of business? But what you have to do at this point, is to learn how to become a successful trader. You do this by creating a trading plan, a plan that works for you with your trade style. Some times I feel like no one listens, but every now and again a customer will come along and say to me…” You took me to the woodshed and made me take responsibility for my trading. I went out and created a trading plan, and I can’t thank you enough for beating me up. I am trading better than ever. Thank you.”
Plan your trade, trade your plan……
