Last night, I noted some changes in behavior in the stock market as represented by the S&P e-Mini futures.  I said that I would be looking for downside trading the next day (today) and that the key level to watch was yesterday's high.  You can read that post by clicking here. Today's Trades We can see that yesterday's 1405 high was indeed the key level.  Being unable to … [Read more...]

A trader sent a very good question last night on a recent post.  Since he sent it via email and since it is such a good question, I decided to make it into a separate blog post.  You can see the original post that he is referring to by clicking here.  In that post I noted a location for an aggressive long trade.  I've posted the chart he sent with his question along with my … [Read more...]

We are at an interesting place in the stock market right now.  Certainly bullish.  We have been rallying without much pullback for several months.  In fact, on a weekly basis, we have not had a down weekly close since the first of the year.  It's an impressive market. We could be in for a down day tomorrow, however.  Yesterday's action gave us a lower low and a lower high on … [Read more...]

Today's S&Ps (ES) didn't give too many opportunities to trade.  Yesterday's high figured prominently in early US trading, as it often does. The overnight market sold off sharply (A) after pushing above yesterday's high, making a new high.  Usually, when we see a sell off like this, we would expect the market to move back up to test yesterday's high with weakness on the … [Read more...]

Not all trades work out as anticipated, even when they appear to have all the characteristics of a solid trade setup.  Remember, we operate in a probabalistic field.  No matter how good the setup, there is still a probability that some trades will not work out. Last week I was looking for gold futures (YG) to rally.  We had many positive elements in our favor.  The market … [Read more...]