What a week for the markets!
Posted by MC on Apr 18, 2008
With premarket we are a hair over the rangebound resistance.
Not going to be easy to hold that, not to mention we have that 2nd area of structure resistance with the 50ma backing it so if we break it shouldn’t go far at right away.
Given this weekly chart, barring a disaster we will close above the downtrend. A pullback test of that new support and/or consolidation under the 50ma will probably be needed if this is the real deal. Disregard the volume, it’s not accurate since this is a TOS continuous chart and they have bugs to work out.
That’s my take anyhow 
The Sea Change has begun
Posted by Cire2222 on Apr 18, 2008
My recent post on the ’sea change’ seems to have started today. Just as expected Oil hit 115 and has begun to fall, the dollar is getting a boost accross the board and gold is selling off hard this morning. This is just what I was looking for. If you are not involved in these trades already then I think it is a fairly safe trade to get short these markets (long dollar) and put stops at recent swing highs in an attempt to catch a big correction move. Im not getting too excited yet but this could be it guys, this could be what I have been calling for. Keep your eyes peeled!
What Technical Analysis will NOT do for you
Posted by MC on Apr 17, 2008
Technical Analysis or TA for short is a tool used by most traders to some extent. It’s the artistic science of using charts, volume and/or indicators to try and pick trades that will be high probability winners.
Newer traders (myself included) often waste a ton of time early on, learning 20 indicators thinking they’ll gain the answer to profit. I think it’s important to address what TA will NOT do for you. TA is NOT the holy grail and never will be. There will never be an indicator that will eliminate the mental edge required to profit from trading. This is why I think it’s best to read some market psychology books before anything else to get the proper core mindset. The true holy grail is your mind, and the better your psychological conditioning the better you are at controlling money management/position sizing. Risk management and controlling emotion are also traits that proper TA training can help foster and develop in a trader.
Lets dig in a bit further…
TA helps us formulate an educated guess about what’s most likely to happen next based on how the chart depicts supply and demand. Also formations and indicator levels that the majority of people use can help. There is a ton of interpretation which should improve as we become more educated through screen time and experience. The better your mentor and the more time you invest in screen time the faster your learning curve. For many, TA is the easy part of the puzzle and the mental side is what takes more effort and time to overcome. This is because our very upbringing and how society revolves is the opposite of how you profit in the market.
Why do I use the term “guess”? Well what a chart cannot tell us is who’s on the sidelines waiting for a certain trigger to jump into the market and buy or sell short. There are millions if not billions of minds at work in the market determining what fair value means to them. The market is an auction and someone’s thought about perceived value changes on every tick. This makes the market ever changing and what HAS worked is not guaranteed to work going forward. Chop days show a balanced market, other than that the market is making waves to try and find that balance between buyers and sellers.
So in closing, a good rule of thumb in the market is look at why you should NOT take the trade and TA can help out.
Focus on mastering a few select indicators and use them consistently since it’s consistency that will lead you to profit in the markets.
Good trading, hope this helps. Stop in the forums and check all our great content that keeps growing.
www.tradersbase.com/forum
How to use pivot points
Posted by Cire2222 on Apr 16, 2008
Many of you have heard of pivot points and may use pivot points in your trading. I wanted to go over a possible way for you to use them in day trading. Below you will see a Dow Mini futures 5 min chart with that days pivot points plotted on the chart. There are a couple of various formulas to compute the pivot point numbers but the standard formula is as follows:
Resistance 3 = High + 2*(Pivot - Low)
Resistance 2 = Pivot + (R1 - S1)
Resistance 1 = 2 * Pivot - Low
Pivot Point = ( High + Close + Low )/3
Support 1 = 2 * Pivot - High
Support 2 = Pivot - (R1 - S1)
Support 3 = Low - 2*(High - Pivot)
Once you have calculated your pivot points your ready to use them. You may have heard other ways to apply pivot points to your trading but I would like to show you how pivot points have helped me on any given trading day. This is a list of trade set-ups I will take using pivot points:
- On an open at or near a pivot point I will stay on the side lines for a clear break in direction
-On an open in between two pivot points I will Fade the first test of a pivot point
-On the first solid break of a pivot point I will Buy/Sell the first pullback to that same pivot point
-On the third test of a pivot point I will go with the move in anticipation of a break
-typical stops are set a few points from the pivot point
-typical exits are half the distance to the next pivot point and the complete distance to the next pivot point
Below is a 5 min Dow futures chart with trade set ups noted. As you can see, on a day that has alot of movement this simple set-up can be very profitable. For any questions visit the tradersbase.com forum
Wed night review
Posted by Cire2222 on Apr 16, 2008
Today the stop loss was hit in gold, trade is over for now. After catching the HUGE move down we tried to re-enter short and catch a continuation move down and we got stopped out, can’t win them all. Oil hit $115 a barrel so tomorrow If there is no sell off in oil I will cut my losses short in USO and concider that trade over. One forex trade I mentioned in the forum and still like here is the GBP/JPY cross, it’s not the most common of forex pairs but I like it to the long side. As for the S&P, I still have no bias in direction and have no set-ups ready, I will note that we are right near that same upper trendline we have failed to break time ang time again. Each time we test that trendline we increase our chances of a break, I do expect it to break soon to the upside but do not see a solid entry here.
Tues Review
Posted by Cire2222 on Apr 15, 2008
Today oil popped up to new highs and we entered our short position in USO. I will watch carefully the next few days, I am expecting oil to get no higher than 115 during this trade and i expect a downward move to begin by thursday, If this criteria is not met I will exit the trade. INTC released earnings after the bell sending index futures up much higher tonight. Expect tomorrow to bring a much more volitile trading day. I have no bias in this market right now. I still like gold as a short, It is stuck range bound waiting for the follar to pick a breakout direction.
Oil
Posted by Cire2222 on Apr 15, 2008
This morning Oil got a little surge up so I took this chance to enter my short position in Oil. If we get no signs today or tomorrow of a reversal on oil I will look to exit quickly and cut my losses short. This is a low risk entry at an attempt for a large move down.
Not much to say
Posted by Cire2222 on Apr 14, 2008
Slow day in stock market today, Not much to say. Forex is acting strange looked like dollar was going to rally then it gave up. Gold fell hard over night then turned and rallied and finished fairly flat, up a tad. So not much to talk about tonight lets see how the week unfolds
Sea Change? Top in Oil?
Posted by Cire2222 on Apr 13, 2008
Doing some scanning and reviews of multiple markets I saw a few things that got me interested in a few markets that have to do with one another. Those markets are Oil, Gold and the united states Dollar (wheat,soybeans and corn as secondary markets) I am not one to try to call tops but every now and then I think its worth a shot in the dark for an attempt at some big potential profits. So im going to attempt to call this the top in oil. Oil, gold and the dollar don’t always trade hand in hand but they do have a big relationship. We have already seen Gold put in a big reversal move (that we nailed here @ tb.com 
) and to me it still looks bearish. We have also seen a couple of the grains (wheat and soybeans) come down well off thier highs, the last leg is Oil and the dollar then we will see a complete Sea change in this recent massive bull run in commodities. How can you play this? If you don’t trade futures you can trade ticker USO ( see chart below) for oil, GLD for gold and there are some stocks too such as CVX, RIG, SLB, DO, GG, AUY etc. Below you can see some charts in regards to this matter. I would expect this to being in the next 5-10 days. If Im wrong I expect to be VERY wrong.
Chart from MC days ago in regards to the DOW/Gold relationship
USO chart with a reverse symetrical triangle and bearish divergence
Gold, not all that shiny anymore is it?
Posted by MC on Apr 13, 2008
Gold, not all that shiny anymore is it?
We got the blow off top as the first sign of weakness. Now we had sizable volume come in at the resistance of the downtrend and moving average cluster.
Target one would be the structure support line, target two would be the base of the down channel. Pretty tight stop on this guy at probably $963, well worth the risk for the potential downside IMO.
