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Posts Tagged ‘consolidation’

In what many thought was going to be an option expiration ramp day up ended being a restrained day of measured pace.

You know the drill, summer Fridays at the office in August are for the recreationally impaired. The work is done early, then it’s party time. I hope you play by the same rules; life seems more fun this way.

The Illuminati certainly wont sit around on Friday afternoon waiting to grab two tics out of the market. It’s about getting optimum results in as focused time as you can.

See if you can pick the few bars that the big boys made the most money in the least amount of time.

The rest of the day was sideways action with a well timed stop run at the end of the day for hapless shorts thinking about a late day plunge.

Fuggedaboutit.

Secret code traders again laughed all the way to the bank.

Let me know when you are ready to join them.

 

 

10 am reversal

10 am reversal

 

Git ‘er done, go play.

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It has been said that Bulls lift the market up with their horns, and Bear markets slap you down with their paws.

Who knows whether we are in a Bull or a Bear market, I am certainly not bright enough to know. Let the analysts continue guessing; I am happy to take my slice out of the middle and go to the sidelines. For now, the trend seems down so I love to take trades in the direction of the trend until provern otherwise.

Today’s pause predictably caught overtraders on both ends.

In an athletic contest like baseball, this  would have been a pitcher’s duel, a 1-0 game. After extra innings.

The defensive play was outstanding, and not much offense. I guess the bear’s bats were tired, and the bulls just played bunt and run, as they are in a three day hitting slump.

At least no one got badly injured.

Holiday weekend is coming up, the volume seemed light, and the boys are hoping for some nice weather as they head for the Hamptons.

Dont overtrade when they are hitting the links and having a few T and T’s. Get the morning trend trade right and take the afternoon off as a gift to yourself.

Like I always say, if you can’t beat them, may as well join them.

Here is another professional worth studying, in my opinion. 

Play it light tomorrow, and come back refreshed next week.

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Gap up, trap early shorts, consolidate, squeeze them. Consolidate, pull back as profit taking, keep pulling back squeezing the longs.

The numbers change, but the patterns are familiar. A news report like the CPI is an excuse to move the market, and hapless traders get stopped out several times on the short side. Finally giving in and chasing it looking for the trend day, they get their clocks cleaned in the other direction.

Double trouble.

Keeping track of gaps and knowing your potential targets helps to guess what they have in mind. No guarantee, of course, but an edge.

By carefully studying ballistic theory we can look for clues that suggests the likelihood of reversals or continuation at these important areas. Chart patterns like doji bars, evening stars, and tails are all confirmation that the current trend is about to end.

Experience is really the best teacher in spotting reality at these often confusing market support and resistance levels.

 

 

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Consolidations wear over-traders out.

Today was such a day.

Transparency in the market is seldom obvious, but today was an exception. The resistance held as expected, and support came in right on cue.

As an administrator in a popular chatroom, I advised traders correctly to the tic. Obviously I can’t be that accurate everyday, but it is certainly gratifying when I can help a room full of traders make a lot of money.

Range days characteristically are boring, slow motion, tedious days.

Since the range is smaller than normal, you can compensate for the lack of travel range by adding more contracts. If you guess wrong, however, the added risk must be tightly managed.

Accepting what the market gives you is a mature approach to trading. If you are uncomfortable with the added position size, then this approach is counter-productive.

A proprietary chart I use nailed today’s action.

It will work for you too.

 

 

 

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