Although the market was oversold coming into Monday, it took another day for it to rally. It did Spring (A) and Test (B) Friday’s low, but supply soon swamped demand on the wave down to C, forcing an exit to longs.  As I mentioned in Sunday night’s post, it is important to maintain a flexible attitude.  With the supply swamping demand, the inability to reach Friday afternoon’s … [Read more...]

In the US markets, volatility has picked up dramatically.  From about the beginning of the year to last week, volatility was contracting.  I circled this area in blue.  Many traders were complaining that it was hard to trade in the lowering volatility environment.  And, it was! Volatility Affects the Mind, Too It really has been hard to make good trades--not impossible, of … [Read more...]

We saw quite a dramatic sell off in the US Stock markets today.  The S&P e-minis fell over 40 points.  We were looking for a push down in our weekly game plan.  It rallied a little higher than anticipated, but then we sure got a push down in classic trend day market action. Today's strong move down obviously changes the idea that the market would find support around 1490. … [Read more...]

Of course, no one knows how the week will unfold in the US Stock Market (represented by the S&P futures, ES).  Nevertheless, we can make some assumptions and lay out a game plan for trading the week. Although buying came in on Friday, there was enough selling on Thursday to turn the immediate market bearish.  Thus, we are likely to see early in the week that Friday's … [Read more...]

On Friday (yesterday), I was in a live trading event sponsored by my good friends at TradeGuider.  As always, I prepared for trading the night before.  My nightly analysis indicated that I should look to play to the short side around the 1513-1515 level. In the overnight Globex market, the ES rallied to about 1510, and then stalled just before the US open.  I thought, "OK, … [Read more...]