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Monday was another horrible day. Again, trying to guess tops of swings….etc. Minus R 8.5. 20 some trades. Tuesday was much better, plus R 2.8 in the end. I am going to slow my trading pace down, and try to use trendlines and major support areas from 15 minute charts for my entries. I will also trade gap fills. I want to wait for the price to come to me, and trade it. Goal is to trade MUCH less. Once to twice per day. Trying to make up for losses by continuing to trade/ scalp is killing me. S/R points will be on the chart prior to market open!!

SPY Trades:

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I had a rough day yesterday, to the tune of minus R 9. My feeling was of trying to catch up. I wasn’t looking for momentum moves, 2 B tops, or 2nd time through trades….I was trying to dig myself out of a hole I made from trading the open. I was trading chop, trying to guess tops of swings. The very thing I swore I wouldn’t do. I looked for a good trade to post, I found one, out of 30 or so. Then I felt sorry for myself and ate chocolate instead of posting it. I knew a day like that would come. And I welcomed it…. after I pondered my lessons. I need to concentrade and trade the charts. Plus R 2.8 today. I was down for most of the day, but I was calm, and looking for quality setups. So, day 8, and I am still up R 10.7 trading the indices. Charts on the weekend….of what I saw today. Discipline = moola.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Half the reason I post these trades is to get me away from staring at the charts after I have identified and traded a setup. So here I am. I saw a momentum push with volume this afternoon, and waited for a setup to follow…which it did. Momentum precedes price.

SPY Scalp:

2 more…

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Looks like a breakaway gap today for a “rally”. 2 wins, 2 losses. Kept my losses small….about all I did right today :/. Plus R 0.7.

SPY Scalps:

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Here is a shot of my setup. I plot S/R lines on my 5 minute chart (not shown) before the open. There is a trade right as I took the screen shot, but I didn’t take it. NYSE ticks pulled back (up for short), momentum is down on all timeframes, out of a decending triangle of sorts on 2 minute chart. Market made an impulse move down from here.

Setup, and a trade I didn’t take:

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I looked after 2 pm eastern today (volume picks up then), to see a momentum push down on SPY 2 minute chart to support. A bear flag formed, and support failed the 2nd test of the day from a bear flag. Played pullback to 8 ema on the bear flag, waited for momo to shift down, and captured 18 cents.

SPY Scalp:

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

What a day. 3 wins, 2 losses. My execution was horrible. I am glad these errors are popping up now that I am trading small. I kept my losses small, but let a R 2 gain turn into a loss on my second trade. I bought more shares instead of selling them on my 3rd trade. I am going to look at the “close position” tab on Book Trader with IAB to fix this finger F problem. At the end of the 1st hour of trading (my “day”), I am up 20 SPY cents, or 28 bucks and R 1.4 net. I have gained R 12 in 5 trading days. As a reward I will trade 300 shares tomorrow. Marty Schwartz look out.

On a side note, I eventually plan to scalp YM. I was watching it this morning, and the spread was 1 point more than 95 percent of the time (a guesstimate).

SPY Scalps:

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

2 for 3 today with a loss that I let get out of hand for my style. I think I will put in a hard stop in at 10 cents for the current market and my methodology. My 2 winners had drawdowns of 1 cent and 3 cents during the trade. Plus 21 SPY cents total, R 1.8 net, or a whopping 36 bucks.

SPY Scalps:

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

2 scalps today for 12 SPY cents. I could have gotten a lot more out of the second trade. I was ready to bail on a 6 cent initial protective stop today. I still consider 10 cents my “official risk”, so I netted R 1 after commissions. My max drawdown on each trade was 1 cent using market orders. I am pretty freaken happy with that! Done early as I see low volume ahead of the weekend.

Chart SPY:

Time and Sales SPY:

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I went over my scalp winners for today and yesterday, and these are the drawdown amounts after my entry for each trade in SPY cents before I exited for a profit:

7 cents
2 cents
4 cents
5 cents
2 cents
3 cents
1 cent
1 cent
2 cents

I am very happy with these results. These are with market orders, so I am pleased I am hitting the momentum at the right time for the most part. My stop is mentally set at 10 cents, with a 30 cent hard stop in case the shit hits the fan. I am wondering if I should tighten my mental stop to 5 or 6 cents. The smallest winner (2 cents) had the biggest drawdown (7 cents)…..go figure.

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I forgot to mention I have a NYSE TICK chart up as well. So, 89 tick, 1 min, 2 min, 3 min, and 5 minute chart, and NYSE TICK chart, that is all I need (Steve Martin joke).

I tried to play the open like I saw on tradethemarkets.com. The first trade worked, but then I kept scalping immediately for 2 more trades for a 12.5 cent loss and a 10 cent loss. I should have had 10 cents out of the first trade, but for some reason my trade details and ticker disappeared from the IAB execution screen. I gotta figure out what happened there.

I need to wait for swings and a definable setup to scalp the way I do. So my very bad. I recovered, and ended the day up R 2.25. I quit early as I see chop, and low volume ahead of Thanksgiving. Happy Thanksgiving all! My wife is cooking….I mean buying a cooked turkey from the Marriot Hotel here in Mexico. Nothing like the taste of home ;).

All times central on the trade log.

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3 for 3 today. Nice finish to the week, even though none of the winners were for much $$$.

Man, I am catching “futures fever.” I even made a trade on SPY today, for heaven’s sake. Yeah, it’s just a matter of time, now. I went to the TradeStation account forms last night, even, but stopped because the first page said 1 of 5. Five pages of forms…. uhhh… maybe this weekend. I am a lazy lazy bastard. But, I have always wanted to do some TS programming, and moving $6k or so into a futures account would be a cheap way to get into that. Still thinking about it.

(not to mention, the futures mavens in the eot room did way better in the ES today than I did in equities, and they didn’t have to frantically flip from chart to chart all day looking for setups!)

Watch this post's video on Youtube

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“It’s lights out for the economy; the Fed can’t sit on their hands any longer.”
- Chris Rupkey, Reuters Analyst

Even the most diehard permabulls would find very little to cheer about today. The uptrend in SPY of the past week or so has been decisively broken, with a gap down that never filled nonetheless. And if that wasn’t enough to beat down the bulls, note that today’s down session experienced the highest volume ever since Helicopter Ben’s smackdown on August 17th. There was no appearance made by the PPT today. You would be pressed to find a more definitive statement made by the bears. They’ve drawn their line in the sand once again, and the onus is now on the bulls to respond. The last two places of solace for the bulls remains the 200d SMA, and some significant buying support just under 1440, which most likely will be tested some time next week.

The above 10day chart highlights the support and resistance zones that I will focus on for next week’s trading.
In the 10day chart, the red zone highlights what I have identified as a potential island cluster reversal pattern. The longer SPY stays below the red zone, the more courageous the bears become.

Market Sentiment
Indicies
The Techs (QQQQ) led the charge in the attempted recovery during the past two weeks, and remain the healthiest market. The small Caps (IWM) remain the weakest market, as it has been below the 200d SMA well over a month now. In general, the indices remain in a bit of a sideways mess.

Sectors
SMH and XLE led the charge during the past two weeks. But in the past few days, it has been Gold Miners (GDX) that came out of left field to take over as the definitive leader. Gold in particular ran up to new 52week highs today, although it did come back down near the end of the trading session.

Perhaps the prospects of lower interest rates at the Sept 18 meeting, seasonality factors, combined with the flight to quality mindset in more investors has driven them to bid up Gold and Gold Miners. XLE continues to remain in a healthy uptrend, so these two commodity sectors will be the ones to watch in the next week or so for continued leadership. In my opinion, this week saw the start of sector rotation, as I think the best long trades in the coming week should be found in oil, and especially gold miners.
The financial sector continues to look very sick. Anyone who missed out on the opportunity to pick up BAC with a 5.5% yield might see another opportunity coming up.

Tells:
I like to track IBM, AAPL, GOOG, RIMM, MA, C, GS to give me a pulse on the overall health of the market. Most of them look more or less neutral, with the exception of AAPL and IBM. AAPL broke below its 50d EMA, and IBM looks like it might be putting in a double top. Both of these are bearish tells as I see it.

Indicators:
The BPCOMPQ was looking good up until today. The 10d EMA was set to cross above the 20d EMA, but now it looks like the BPCOMPQ is set to break below both of them. This coming week should provide some answers as to whether the BPCOMPQ can stay above the 10 and 20d EMA’s.
A similar situation exists for the BPSPX, so the same comments apply.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

“I don’t see any impact as yet on the real economy or on the inflation rate …… there is no need to consider an emergency rate cut.”
- William Poole, Aug 15, 2007

A day before the big washout on Thursday (Aug. 16/07), I mused about how there might be some technical reasons for the 1376-1380 to act as support for the S&P500 Index (SPX). Well, lo and behold, the markets touched that area on Thursday, and bounced off of it on a 1 hour rally with no pullback. Now as if that wasn’t strange enough, Helicopter Ben decides to step in with a coup de grace announcement in Friday’s premarket session and laid a real medieval beatdown of the shorts who held overnight. The SPX gapped up to the stratosphere to open the session, and sold off steadily, but stopped right at the gap fill, and that was it for the bears, as the markets trended back up for the remainder of the session.

Thursday’s V-Bottom created a high volume hammer candlestick. The last time a hammer reversal occurred was back in March 2007, which eventually marked the bottom for that mini-downtrend. That doesn’t necessarily mean that yesterday was the bottom, but it could be the bottom, and it certainly sets the markets up for an FTD.
The SPX still closed below the 200d SMA, and the trend is still down, so the market is not out of the woods yet.

In the above 10-day intraday chart, I’ve identified some support and resistance areas that I will be watching out for in next week’s market action.

Market Sentiment

Indicies:
Both the Blue chips (DIA) and the techs (QQQQ) bounced off their respective 200d SMA’s, so they are the healthiest markets. The general market (SPY) and the small caps (IWM) remain the weakest markets, as they are still both under their respective 200d SMA’s. There are currently no bullish or bearish divergences between the indicies. Note also that Japan’s Nikkei Index plunged over 5% on Friday, and their markets are now officially in correction territory. It bears watching to see if there will be any negative spillover effects on the North American markets.

Sectors:
SMH, XLF, IAI, GDX, XLE, they all acted in line with the general markets, so still there is no one is stepping up to the plate to provide leadership. SMH and XLE appear to be the healthiest of the sectors that I am tracking. Interesting to note that BAC had a yield of 5.75% at one point last Thursday. The whole financial sector was so beaten up and oversold that Thursday panic washout really looked like a capitulation to me. If you flip the chart of XLF upside down, it has all the signs of a blowoff top.

Tells:
I like to track IBM, AAPL, GOOG, RIMM, MA, ICE, GS to give me a pulse on the overall health of the market. They all bounced strongly off of thursday’s lows. Other than that, though, there’s not much information that can be gleaned yet from this group of stocks.

Indicators:
The BPCOMPQ dropped to levels that have marked the bottom of corrections in the past three years. That doesn’t mean it can’t go lower, as demonstrated by the BPSPX. However, I think we would need to see a sustained close below 1400 in the SPX in order to drag the BPCOMPQ any lower than it is right now. And if the BPCOMPQ does not go down any more, then I would look for signs that it is moving back up. Note that the NAA50 is already heading back up.

On the other hand, the BPSPX dropped to levels not seen since 2003, when the markets were starting to recover from the dot-bomb bear market of 2000-2002. The SPX is acting as if it is in a bear market, but it is not in a bear market (at least not yet). A sustained close below 1400 (10% drop from the highs of 1555) is the criteria to be officially labeled a correction market. A sustained close below 1244 would be required for the SPX to be officially labeled a bear market. And since we haven’t even had one close below 1400, we are still officially in a bull market.
The SPA50 also moved to deeply oversold levels not seen since 2003 before bouncing back up.

There’s a lot of confusion still in the market. No one really knows what is going on. There are bullish and bearish scenarios that can be inferred from everything that I’ve describe above. But it all boils down to this:
Was Helicopter Ben’s announcement of a 50basis point cut in the Fed Discount Rate on Friday morning, combined with the 40pt, no-pullback rally on Thursday afternoon enough to spark a change in sentiment? That is the question this inquiring mind wants to know…….

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

SPY took a tumble today, then made a miraculous recovery. I was right there on WallStreak calling the bottom. Since I am 10% at calling market direction, I thought I’d better post my call ;) The measured move is the coolest part, and uncannily accurate.

SPY

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