This past weekend along with a couple epic bike rides and feasting during the Superbowl I read the book How I Made $2,000,000 in the Stock Market. It was a fantastic read. I bought it on amazon for $4.00 including shipping here. While I must admit a lot of the concepts I had already had ingrained in my mind, to the new trader or anyone currently on their own trading journey I would highly recommend checking out this book.
The markets formed a doji in week one of 2012. This is a sign of indecision and could be expected at the onset as traders and hedge funds begin to pick up trading again in the new year. That being said it is the long term investors which drive the long term trend of the markets. Aside from the intraday and a few small daily trends, we have really gone nowhere in the past year. We saw a few longs…
This is the first time in a long time we’ve seen increasing volume on the rally after a decline. While a lot of this volume could be do t government intervention, it’s still a positive sign technically for the markets. If you missed it, Reuters announced that “Major central banks agreed to make cheaper dollar loans for struggling European banks to prevent the euro-zone debt woes from turning into a full-blown credit crisis.” The stocks we”re trading haven’t changed, refer…
The image above should tell the whole story. We’ve been going sideways for the past two months. Surprisingly it has made for some decent trading, but just wait until we begin trending again. Things will really start to pickup in the options markets because the moves in the individual underlying will trend more. In these conditions of sideways and high volatility it’s important to stick to your rules and WAIT for your setups and remain patient. As always, think risk…
We’ve seen it before. If you zoom out to a daily you’ll notice it looks very choppy, this is one of the most difficult conditions to trade, just look at May 2010. Stay patient, watch for confirming breakout in the VIX if we do make new lows. A rally to 1225 on the ES before selling off again is possible. SPY August 2011 compared to… SPY May 2010