S&P500 Emini future Trading Plan – As January goes so goes the year. Corona, Ca Jan. 28, 2016
Traders have many superstitions which are backed by some correlations and timing. One of these is: as the first day of market goes so goes the week, so goes the month and so goes the year. If this is the case then this could be a down year for the market. We have a few more days to go so we shall see.
Inverted Head and shoulders could extend the buyers move up to resistance 1911, 1940, then 1956.
If sellers execute off this possible flag pattern, then we could retest the support at 1865, 1849. then 1804. If the market sells off then watch for 1769.25 as next major support.
Lots of volatility headed into this market with no clear direction in this consolidated area with smaller range candlesticks during this past week.
Will we confirm this past move down to 1804? Will we execute off of support and buyers control the next move up from the Inverted Head and Shoulders?
Conflicting patterns. Short term day trading of support and resistance based on commitment of traders are giving the most solid signals.
Next we look at a trading plan for Gold and how buyers are getting squeezed on all the reversals from lows. News is pushing this market around with a lot of volatility. If you are new to trading it is best to stand on the side and practice your entries and stop management in a simulated trading account. There is no real direction in the market with a lot of media claiming we are oversold. This could be a consolidation zone where the market is resting to gain strength either for a reversal or continuation of the move down. We will see who commits to the direction of the market soon as our daily price range is decreasing.
Corona, Ca December 17, 2015 Bear Market – what is a bear market and are we in a bear market?
With the Fed raising rates by .25% this past Thursday I have received many questions about this supposed bear market that the US. First let’s look at the S&P500 emini futures.
A bear market occurs when the market stays below a 20% move from the swing highs.
On this daily chart, we can see the high was 2100. If we take off 20% from the high the price the market would have to stay below is 420 points lower around 1680.
When Will a bear market occur?
A bear market will occur when we are below the 20% drop in the market from its high.
Presently, the buyers are still in control to the blue zone where sellers will have to be in control to keep direction moving us towards the Next blue zone around 1700.
The market is in a consolidated range. We are in a 200 point range where price is looking for a commitment to either move higher or lower. Our present pattern is buyers are in control so we would be a buyer of dips, until price breaks below 1960 where sellers are in control for the short term.
Gold is in a Bear Market
If you look at a 20% decrease in the price of gold from 1900, then price below 1500 will be in a bear market.
Price has been below $1500 since April 2013. We don’t know when it will change direction and become bullish, but as US debt increases many of the “Gold Bugs” believe it is bottoming.
Technically, gold looks like it still has a little bit more to go and could break the psychological $1000 an ounce soon.
Traders on a Cliff – December trading plan 2015, Corona, CA. Markets are on the cusp of a sell off or are they on support?
We started the week thinking the S&P500 emini futures could be heading to new highs, even though the news was nothing exceptional which normally means a rally, sellers moved in and took control of the direction.
Sellers took price to through the 200 MA just as we were getting the Bullish Cross of the 50 Moving average and the 200 Moving Average.
Support has come in as the previous swing lows just above 2000 (the psychological support)
1998 to 2004 is first support, next support coming in at 1980
Then Previous point of control at 1960 for direction and possibility of moving to 1938.
Day Trading Plan for a sell off. What if the markets sell off and break through these supports?
Where will be the major supports for a major sell off? First we would look for 1860 then a double bottom at 1820 confirming the previous swing low on major seller price action. These are the targets for a sell off.
Day Trading plan for the Fed announcement on Tuesday.
|Dec 16||2:00 PM||FOMC Rate Decision|
Stay away from the news on this, you are going to hear them crying over which way to go and how it could effect this or that and give us some of the biggest margin calls in history and the collapse of the bond market.
Trading the News is for the il-informed trader. Never speculate.
Stay away, wait until it has direction and then join in. Don’t try and guess the markets. Wait until you see the direction of the market.
Normally when everyone is crying doom and they bring out the doomsayers you haven’t seen in years, I would search for the contrarian positions. It seems like everyone is thinking “this could be bad”.
I am watching for consolidation on both Monday and Tuesday with a possible move down to the next support level.
Being a buyer of dips could be expensive here as there could be quite a bit of volatility.
Remember, you don’t have to trade. You can wait for a market condition you are more familiar with or you have experience trading in with proper risk management.
It is the end of the year, do a little self reflection, write in a journal, project where the markets could be going. Go over you system and see what works, needs some work and what could be thrown out. The key is mastering the education you have and leveraging it a risk management system that protects your capital.