It looked like the market was going to open higher this morning but the bell rang and the Dow is now off by 100 points this morning. The Dow has been channeling between 9600 and 9900 over the past two weeks looking for some kind of a break out above 10k. We had nice little rally up to 9917 and then it was just like we hit a brick wall and stopped up against a resistance level. But in all fairness to cycles and patterns and bull market runs, we ran up for 3 weeks from 9252 to 9917. That’s a nice little 600 point run no matter who you talk to. So this consolidation up against the 10,000 level is to be expected on one hand but on the other hand this is considered major resistance and could be a technical ceiling for the market. Check out the short term chart on $DJI and you can see this nice sideways consolidation that we are trading in right now. This sideways action can whipsaw you around if you are a swing trader or even an active trader trading intra day. My whole point to this little blog I am writing is this….If you are having problems trading right now; if you catch a fresh cross today and tomorrow it fails; this is not your fault or bad timing. It is market conditions; it’s the way the market is trending right now. For some of you this may be a time to sit on the sidelines and let the market do what it does. Yea you’re not trading and yea you aren’t making money, but it’s better than getting stopped out and whipped around and you’re beating yourself up because you can’t understand what you are doing wrong.
Watch the overall market and keep these symbols $DJI, $COMPQ and $SPX close to you. I personally keep them on my back page of Wizetrade and look at them everyday just to see the overall trend of the markets.
After the sharp sell off late last week the market is “bouncing” today off of Friday’s lows. The Dow is trading higher today up about 130 points with all the lights green across the board right now. Looking at the 10 minute light we are rallying into the close with less than 30 minutes left. GS is trading up $3.10 after hitting a high last week of $188.00 back on Wednesday. I guess the big story will be if today’s rally could hold over the next two or three days. Is the market strong enough to break 10,000? Right now everything looks green and good, but you know as I know, things can change in a heart beat. So watch your charts and use your stops.
September 23rd, 2009
Kipp
As I reviewed my trades today I noticed something that is vitally important to the success of any trader; good money management! By no means do I claim to be the perfect trader. I make mistakes and I take losses. That is a part of trading that we must all accept. Anyone that claims that they never take a loss is lying! What sets the successful traders apart from the rest of the crowd is how they manage their money. The funny thing is that you don’t even have to be 50% accurate to have a good day. Don’t get me wrong, I would much rather have one of those 70% days, but that just doesn’t always happen.
Today I had 10 active trades with 4 winners and 6 losers. You would assume that with a day like that I would have lost money, but I didn’t. As a matter of fact I achieved a 1.25% gain on my trading account today. How is that possible with only a 40% success rate? It’s called good money management. By this I mean that I cut my losers quick and I let my winners run. My biggest gainer netted over a 2% return and my biggest loser was less than 1%. My average gain today was 1.1% and my average loss was ½ %. By following good money management I was able to achieve a profitable trading day, even with less than 50% accuracy!!
September 16th, 2009
Kipp
If you look at the short term and mid term trend of the major indices, it looks like the markets just broke out. Many technical traders were looking for the S&P 500 to break 2050. Well, guess what happened today? The S&P closed 18 points above that level. Now, if you look at the long term trend of $DJI you will notice an inverted head and shoulders pattern. This is the same pattern that I referred to in a blog post back on June 22, 2009 when the Dow was at 8339. As Blake Morrow mentioned today on WTV today during Lunch Money, bear market rallies tend to reverse once everyone has gone long. Stay nimble and be ready for anything! The Dow Jones Industrial Average ended the day up 108.30 points, to close at 9791.71. The S&P 500 gained 16.13 points, to close at 1068.76. The NASDAQ finished the day up 30.51 points to close at 2133.15.
Kipp
