Posts Tagged ‘stocks’

VWAP Discussion and ES and NFLX Examples

Wednesday, May 1st, 2013

The VWAP (Volume Weighted Average Price) is a powerful tool for traders, but you have to understand the implications of what it means to completely grasp it’s use. In the weeks ahead, we will be focusing several articles on the VWAP and how it can be a useful tool in a variety of ways.

If you don’t know, the VWAP ends up operating like a moving average, but it does so by weighting the price and size of each trade.

So for example, let’s say that we have three prices: 40, 41, and 42. An average of those three would be calculated by adding them up and dividing by 3. That would give you (40 + 41 + 42 = 123) / 3 = 41. A moving average keeps adding data in the form of price and dividing equally by the number of data points.

A VWAP, on the other hand, takes two pieces of information for each price into account before doing the math. It takes the price AND the number of shares for that print. So, now let’s say that we have three data points, which is 100 shares traded at 40, 200 shares traded at 41, and 900 shares traded at 42. Note that this is the same 3 prices that we had when calculating the average price example, but now we have size to go with each. What the VWAP does is take each price times size and divide by the total size.

So, we get:

40 x 100 = 4,000
41 x 200 = 8,200
42 x 900 = 37,800

Add those totals up (50,000) and divide by the total number of shares (1200) and you get 41.67, the VWAP. See how the number is far more skewed toward 42, which is where the much bigger print occurred?

So, what do we do with this?

Institutional traders would prefer to buy below the VWAP and sell above the VWAP. Why? Because it means that they got a better price buying or selling their big block of stock for the day than the average trader. A lot of times, that means that if a stock has been moving down and reverses to the upside, it will stall out right at the VWAP. Who wants to be the guy paying more than the average of everyone else? Of course, at some point, someone often does, but that in itself is confirmation that the dynamics of the stock have shifted for the session.

So, let’s take a look at today’s (Wednesday, May 1, 2013) action in the ES (S&P e-mini futures):

We gapped down for the session at A. The purple line is the VWAP of the day as we go along, starting with the open. Note that we opened right where the VWAP had been at the close of the prior session (even though the price late in the day had been much higher).

The market trades flat for the first 30-40 minutes and finally breaks lower on a pair of bad economic numbers. It doesn’t go far on the data, and in fact, after just 15 minutes, seems to be stalling. Keep in mind that this is an FOMC announcement day, which usually means that the market is slow early. So as the small move down fails and the market starts to head up, the ES comes back to the VWAP at B. It then gets blue to the VWAP for hours, really not leaving it either way.

Over lunch, the market starts to drop at C ahead of the Fed announcement. The sellers are banking on something pushing the market lower, and this time the move is bigger. The announcement comes out, and nothing surprisingly negative is in it. Those that were selling ahead of the announcement start to buy back, and it takes the ES once again back to the VWAP at D. Note that this time, the ES uses the VWAP very precisely as resistance and can’t close above it on two attempts. No one wants to pay over that price, and there is nothing compelling to make them.

Do individual stocks care about the VWAP? Sure, let’s take one of the current market trading favorites, NFLX. This stock sold off sharply today in the morning and spent most of the morning down quite a bit. As it starts to rise after the Fed, does any big trader want to be the first to pay over the VWAP? Let’s have a look:

Clearly not.

The VWAP has many terrific uses, but these two charts alone give you a starting point about its validity.

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Unemployment, GDP, and the Current State of the Markets

Friday, February 1st, 2013

There has been a lot of discussion this week about the state of the economy and what the GDP and Unemployment/NFP data that came out during the week means. Certainly, from the media’s preferred perspective of “scare and fearmonger,” the headline numbers of both could be construed as bad. For the record, the official unemployment rate rose from 7.7% to 7.9%, and the annualized rate of economic growth in the last quarter of last year was a negative number. It came in at -0.1% instead of the expected 1.1%. Keep in mind that while the economy still grew at a 2% or so clip for the total 2012 calendar year, the negative number in the last quarter must imply that things are slowing down, right?

And yet, here’s the S&P today, having received and absorbed both of those data points:

So what gives? Has the market become disconnected to reality? Are the 12 people that have any money left in this country and control the markets just buying things up rub our noses in it? Or is everything as it always has been, which is to say that the market knows everything and behaves accordingly and is getting it right?

My vote is for the latter. I’m a market person. I believe in markets. I believe in trade and capitalism…with rules. Or, anyway, I like to think of them more as guidelines. But, I do believe that the market doesn’t get things wrong. It may get shocked once in a while from information it could not have had, but it prices correctly, no matter how few people are in it.

So what’s the deal then at this point? The economy is shrinking and unemployment is on the rise! Surely this is a bad indication under any measurement.

Let’s first caveat away the actual unemployment rate, because I’m in the camp that says that it is almost useless. Let’s face it, the number of people that would like to work more and make more money, whether they be unemployed, part-time employed, or under-employed, is way higher than 7.9%. But, at the same time, there is always an unemployment rate, and a higher number of “under employed.” Almost separate from the economic collapse here in the US, we were going through a process of outsourcing jobs, and between that and technological improvements, I’m not sure we’re near a place that employment will be back to numbers we are used to for a while. At the same time, when people give up looking for work, they drop off the Labor numbers, and unemployment dips. So the irony is, if people have been out of work but suddenly believe there might be jobs, the unemployment rate can rise as they put themselves back into the “looking for work” camp. It’s a survey, folks. Think about it.

So, from that perspective, since we didn’t LOSE jobs in January, the rise in unemployment at the headline level might mean that people think they have a better chance of getting a job now than previously. Little 0.1 and 0.2 percent moves in unemployment are “noise” just for that reason. Don’t get excited. Don’t get depressed.

Did the economy create jobs in January? Yes. The initial belief is about 157,000 jobs. Are those private or public jobs? Mostly private. Here is an interesting fact.

In just about every recovery in the United States in the last 100 years, part of that recovery has been due to higher levels of government employment. This was true under Reagan, Bush (the first), Clinton, and Bush (the second), just to name a few. It has NOT been true under Obama, something that is often reported incorrectly. But, facts are easy to come by if you want to actually look them up.

The Bureau of Labor Statistics has the number of employees of all areas of US government charted. It’s pretty clean and easy:

Note that the spike in 2010 was due to the usual once-per-decade staffing up of Census workers, and then those jobs were gone. So when we say that jobs are being created, they aren’t government jobs.

In fact, if you break down the report, you find that the jobs were mostly in Construction, Retail Trade, and Healthcare.

OK, fine, so how does that 157,000 number compare to historic averages? Let’s take seasonality out of it and just look at a bunch of January’s for job creation, going back to 2003:

January 2003: + 95,000
January 2004: + 162,000
January 2005: + 137,000
January 2006: + 283,000
January 2007: + 236,000
January 2008: + 41,000
January 2009: – 818,000
January 2010: – 40,000
January 2011: + 110,000
January 2012: + 275,000
January 2013: + 157,000

First of all, look at January 2009, the month where Obama was sworn in the first time. 818,000 jobs lost! In a month? Are you kidding me? OK, ignore that year, let’s average the prior 6 January’s. What do you get?

159,000.

Thing is, there is always talk from some about “I’m going to do this and that and unleash the economy and grow a million jobs per month.” It’s not going to happen, under any circumstances. That isn’t how it works. On average, the current number is a respectable number, and when you realize that it was all private sector and not a mix, like we usually would see, well, it’s pretty good.

OK, so let’s put the seasonality back into it and examine the monthly jobs data over the last five years (starting when the economic recession that led to the banking collapse started right at the end of 2007, beginning of 2008). We have that data too, including Friday’s new number:

Hmmmm. Man, all I keep noticing is how bad the job losses were in late 2008 and early 2009. So, when you compare that to the 35-months-in-a-row job creation cycle we’re on, does that look bad? No, in fact, the number on Friday looks pretty solid and the general trend is decent. And again, all of this without expanding the public sector rolls because no one seems to think that doing that is OK anymore, even though it is what helped us get out of much smaller economic dips previously.

How bad was this dip, by the way? If you’re wondering if there is a way to put the job loss from the start of the financial meltdown into perspective, it turns out, there is. These lines each represent periods of job loss in the US since World War 2. The color is marked at the top and tells you which recession started in which year. You then can see the percentage loss of jobs in the economy, and the line doesn’t end until the job numbers get back to where they were before the job losses began.

The current financial meltdown is the red line:

Wow again. Just brutal. The sad thing is, the second longest line is the brownish one, and that started in 2001 and took almost 4 years to get back to square one. This one starts less than four years later…and is worse. Not exactly the best decade for US employment. No wonder people are saving instead of investing (which doesn’t grow us either). You might even call it a Lost Decade.

Which then takes us back to the GDP (Gross Domestic Product) data that came out this week. This was the first look at the data for Q4 from last year. The top line number, as I said earlier, came in at an annualized -0.1%. If you get two quarters in a row of negative annualized growth, it is considered the start of a recession.

So isn’t that a bad number?

Again, not so fast.

The consumer side was quite healthy, growing at over a 2% clip. What knocked the number down was the dramatic cuts in Federal spending, particular out of the Pentagon. Remember that in their infinite wisdom, Congress and the White House worked out a plan two years ago that if they couldn’t come to terms on budgets by the end of 2012, there would be mass cuts equally in Defense and Domestic Spending.

What we see in this data is that the Defense Department cut back a lot of spending in Q4 (none of which included jobs, just material) to try to prepare for the sequestration (forced cuts) that might be looming so that they could spread out the damage. By doing that, it cut into the economy and knocked the net GDP number down. Now, with the end of year deal, the sequestration is delayed until April, which means that the Defense Department will probably continue the same path. In other words (and isn’t is amazing that suddenly they can cut spending), the Defense Department is trying to find ways to spend less without cutting jobs, hoping that this gets resolved, and they still have their full workforce. But of course, if sequestration does actually kick in, the next piece will not only be less spending, but layoffs, basically guaranteeing a new recession.

In other words, just like we learned out of Europe, austerity doesn’t fix a recession. It makes it worse. Instead of just agreeing to in general a minor set of across the board spending cuts and some tax increases that would point the income and spending sides of the ledger back toward each other over time, Congress is forcing a path toward austerity if they don’t work this out.

But here’s the point. The market doesn’t seem to care. Why?

Same reason that I didn’t think the market would care much about the end of year fiscal cliff situation…unless we really didn’t fix it. The market doesn’t believe that people in Congress are that stupid. Stupid, but not that stupid. It may end up being that this ultimately is one of those surprise shocks to the market when it ends up being wrong if they actually do take us down the road of sequestration. That would send us back to much higher unemployment for the THIRD time in barely a decade, and I’m not sure the economy can sustain that at any level.

So really, what the market is saying is, look, employment is growing at a decent pace in the private sector, and could be doing even better if we were adding some jobs in the public sector as well as we usually do in these cases. The economy is actually growing, although the Pentagon is being proactive and trying to offset some future massive cuts by scaling back in areas without laying people off, and those cuts had a surprise impact on Q4 GDP, although without the impact that making those cuts a permanent deal would be. And in the end, is anybody really going to be dumb enough to trigger the sequestration and really jam the country down that road, which is totally unnecessary? The market is saying that it doesn’t think it will happen, and that right now, if they get through it, the economy is strong enough and doing at least as well as can be considering what just happened a mere 4-5 years ago.

So is the market right? At the moment, I would say yes. Because the market said that Congress and the White House would not take us over the Fiscal Cliff January 1, and they didn’t. Likewise, it seems unlikely that we are going to completely destroy the US economy in the months ahead. But, is there still room for things to happen that the market is being too optimistic about? You betcha.

By the way, even if the market does pause or pull back here after the run up that it has had recently, I leave you with this analogy. If someone runs a marathon and then decides to rest, does that mean they are out of shape?

Trade well.

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Tradesight 2012 End of Year Market Summary

Sunday, January 6th, 2013

As usual, we wrap up the year with a report about the markets and our trading for the last twelve months (here’s a link to last year’s report). Having been involved in and trading the markets now for over 20 years, I have to say that this year was unique in many ways, most of them not really positive for trading. Volume and activity were way down in all three asset classes that we trade (stocks, futures, and Forex). Without action, it really takes a concentrated effort to get and stay green. Overall, I would say again that our flagship stock report performed admirably as usual, while Forex had a decent start to the year but really suffered as ranges dipped to extended historic lows. The futures also suffered from lack of range and volume, especially in the second half of the year.

I make the case often that I believe professional traders should be open to trading anything because things go through cycles, and this was certainly a year that would have challenged anyone trading only Forex or futures in my opinion, although the stock stuff had enough moments to make it the easier asset class to trade. We’ll get into some numbers at the back end, but let’s first look at what the market gave us.

The S&P 500 came into the year at 1257.60 and closed at 1426.19 after once again spending a lot of time on the critical ES level of 1312.50 (an old Tradesight joke from the last decade, as is the EURUSD at 1.2737). That’s a 13% gain on the S&P for the year, which is certainly nothing to sneeze at. Here’s the chart, though, which shows that we didn’t have nearly the up and down swings that we are used to:

And you can see that also by looking at the Volatility Index (VIX) for the year, which, for the first time in the last 5 years, never really got a spike over 40, which creates the pullbacks:

Even with all of the Fiscal Cliff concern, there was never really a drop in the market, and we went through an election with no issues. Also, I’m writing this a few days into 2013, and the market is up strong to start the year as well.

The NASDAQ came into the year at 2277 and closed at 2660, a 383 point gain, or 16.8%. Again, nothing to sneeze at for investors:

If you break out the two key tech sectors, the Semiconductors and Biotechs, you can see that the Bios had a decent year:

However, the Semis were actually down for the year at the midpoint (note that the low bar of the year is a 13 buy signal from our Seeker tool:

I’ve already written up a separate Forex end of year report, but for Forex traders, ranges were the problem, and overall movement wasn’t great either. Here’s the US Dollar Index, which basically traded flat in three boxes for most of the year:

The EURUSD was in a smaller range than normal for annual numbers:

As was the GBPUSD:

The USDJPY had impossibly narrow intraday moves, but on the whole, the US Dollar strengthened against the JPY for the year (even though it slightly weakened against other currencies):

While 2011 saw the nuclear disaster in Japan (and the USDJPY has been pegged and tough to trade ever since), the last two years saw all of the issues out of Europe, including the failed austerity actions (failed meaning that the moves to cut spending has only raised unemployment and done nothing to help their respective economies), the potential (still looming) fracture of the Euro, and the self-created Fiscal Cliff mess that Congress set up for post-2012 election over a year ago.

All of those individuals added up to less economic activity, less movement of money, and a lot of uncertainty about taxes and where money was headed. It has also been a much stricter lending environment as the banks are still reeling from the 2008 debacle, and that hasn’t helped. Add it all up, and all of the markets were somewhat stuck in place.

Volume in the stock market is important for trading, and 2012 set an interesting record from the last FIFTEEN YEARS (this fact is extremely important but will be lost on many people). 2012 was the first time in 15 years that NASDAQ volume never saw a 10-day moving average get over 2 billion shares. Our general rule for good trading has always been that the 2 billion share “average” day or better volume is needed for the better sessions. We did have some days over 2 billion shares, but not many, and the 10 day moving average never got over that number, as you can see here:

Compare that to even 2011, where the moving average spent almost half of the year above that level:

Or 2010, which is a year that is much more typical of what we have seen for a long time, where volume is well over 2 billion shares most of the year, except maybe the summer doldrums of August and the Holiday season of December:

Easily, the single biggest contributor to the trading environment is the lack of volume, which means everything is moving less, and following through LESS, which is the most important point.

Another contributor to this, though, was the amount of “fast” money (i.e. daytrading money) that got “stuck” in Facebook on the IPO:

Again, one of the most poorly handled (except for for people working at Goldman) IPOs in history, and if you line up the biggest drop in market volume, it comes with the day that Facebook went public.

This was not a year that needed that to happen.

Here’s a look at oil, which declined for the year (and despite what some people might try to say, is down quite a bit from what we’ve seen on average the last few years):

There are also some interesting points to be made about some of the bigger tech stocks that we trade frequently, such as AAPL, which had a strong early part of the year but sold off sharply late. It came into the year just over $400 and almost broke $500 in the December plunge, although you’ll notice that the Seeker again gave a 13 buy signal on the day that might have tried to break $500, and that has been the low so far (it is behaving like it will break it soon):

GOOG, on the other hand, had a slower start to the year, but clearly came on stronger in the second half as it continues to see better Android sales than iStuff sales, especially in other countries:

AMZN, another favorite trading stock of ours, had a strong year and held it:

And finally, let’s put a few more things into longer term perspective. Here’s the 8-year chart of the NDX, which now makes the 2008 banking collapse look like a blip, but I’ve marked it up with the high in 2007 when oil first closed over $80 (when Tradesight predicted bad things were coming) and the recent post-stimulus trendline, which started in early 2009 and tested as recently as September. This is a line we’re going to want to watch if the looming “battle” in 60 days leads to too much in spending cuts (“austerity”), which will most likely put the recovery on hold and hurt the markets:

Here’s the S&P over the same period, which hasn’t yet reclaimed the highs of 2007 prior to the collapse, but is clearly in a “channel” that we can monitor:

And finally, here’s the VIX over 8 years. You can’t do a year-end report without showing the importance of the VIX or Rich will get mad:

Remember that the VIX over 40 usually means panic is setting in and a reversal is ready to happen. The spike to 90 and the period of 3 months that the VIX basically held over 40 in late 2008 on the collapse was historic, and at the time, what we said was that when it finally retreated under 40 (which happened in March 2009), that would a long term bottom in the markets. So far, that has proven extremely accurate, but it was also predicated on a lot of good economic decisions coming out of Washington. And certainly, we’ve made the money we wanted on that move. I’m not sure based on the actions out of Washington over the last 18 months or so that we can assume that good decisions will continue to be made, which can still derail the train. Keep in mind that the downgrade of US debt, if you read the report, was not because of our debt ratio or growth rate. It was because of a concern that Washington was suddenly so dysfunctional that it wouldn’t do the things that it has always done to show that the United States is the responsible leading financial player in the world (i.e. always pay our bills and don’t pretend that we wouldn’t).

With the Fiscal Cliff at least behind us (and if they had just done it back six months ago, things would have been a lot better the last six months for trading), we’re already seeing better volume and movement in the opening days of 2013. Unfortunately, they couldn’t get more than a 2 month extension on the sequester, so the spending battle looms and lines up with the debt ceiling increase (again, the more you suggest that the United States might NOT increase the debt ceiling, therefore might NOT pay our existing bills), the more it hurts the economy. And, just like everything these days, my expectation has to be (in terms of guiding traders) that Washington will take it right up to the last day again because they can’t put the country first. So, we will see how long the “better trading” environment that we are seeing signs of lasts before the market gets crippled again wondering how that will be resolved. If you want a better trading environment, call you Congressperson and let him/her know that they better put together a deal that lasts for several years so the market and the economy has certainty. Believe me, that’s more important that the DETAILS of the deal. We can’t keep going through this every 12 months.

So, in the context of that market environment during 2012, I think it is clear that stock trading was the better asset class. Every year, we have one, maybe two months that are losing months in Forex as ranges come and go. This was the first year (in the seven that we’ve been doing Forex) that we had THREE months IN A ROW even that had losses. That’s how bad ranges got.

Meanwhile, almost 70% of our stock trades that triggered with market support worked enough for a partial, which means that even though there were more than normal that didn’t do much beyond the partial, you shouldn’t lose money on those 70% of trades. And we still had plenty of big winners, all of which you can track daily in the Market Blog even if you aren’t a subscriber.

The futures were the middle ground. They still behaved technically, but I see a lot more false starts where a nice setups sweeps once and stops and then works at least to the partial the second time than we have seen in prior years. And that just creates a lot of whiplash and net-nothing days.

I do expect ranges to come back in Forex, and as we see stock market volume improve, Futures will see better action. Stocks, while fairly consistent, will get even better, with more trades following through, with market volume.

So, even though Santa has already come and gone for 2012, if you are asking for anything, ask for volume in the markets. Or better yet, don’t ask him, ask someone in Washington DC, as they are really the ones that can make it happen. But no, the stories you here about “regulation killed the Forex market forever” and “High Frequency Trading makes it impossible for retail traders to make money” are all nonsense. Economic activity will only grow over time on average.

Here’s to a great 2013, and thanks for being the best subscribers in the world.

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A Classic Look at Window Dressing

Tuesday, April 3rd, 2012

One of the features of the end of a quarter is known as “window dressing.” Funds and institutions are measured by their performance and holdings from quarter to quarter, more than they are from month to month. What this means is that as we approach the last few days of the quarter, the funds have to do final adjusting on their positions so that they show the number of shares that they want. For example, if a stock has performed badly during a quarter, they want to show less on the books. If a stock has performed well, they want to show more.

But the funds have such large positions that they can’t just buy and sell enough shares on the last day to get themselves where they want to be. They spend the days and even weeks leading up to the end of the quarter positioning themselves. Once they have done this, there is less buying and selling to be done until the quarter actually ends and statements print. In addition, they want the prices to be stable after they have set their shares.

What we have seen over time is that this leads to a 3-day phenomenon known as “window-dressing.” The net of these three days is often nothing at all as the big players have nothing left to do.

Here is a look at the last 3 and a half days of the quarter, ending last Friday, on the S&P 500 index, in 5 minute bars. Note that I’ve drawn a flat line from the close on Tuesday, and we closed almost exactly at that same price on Friday:

Classic window dressing. Something to be aware of next quarter if you weren’t already.

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The New Volume Read

Friday, February 24th, 2012

One of the most important keys to success in trading is volume. When the market is trading average volume or better, things happen. Technical triggers and technical behavior work. It’s easier to make money. When the market doesn’t trade good volume, things are less likely to work.

One of the things that we teach is that traders need to recognize days that are likely to be light on volume, such as Holidays, Holiday weeks (Christmas, etc.), summer break, and more. During those periods, less people are trading, which means fewer trades are likely to find the support of traders and the “counter” players such as market makers and banks will stop trades from working.

Success in trading is about doing the high probability things at the points where they are the most likely to work. Without volume, they are less likely to work.

For years, we measured volume in a simple way. If the NASDAQ volume after 30 minutes was over 250 million shares and after 60 minutes was over 450 million shares, then you had at least an average volume day or better. That increased your odds of success. Now, the same rules apply. A few weeks ago, we had five days of above average volume and tons of trade triggers and most of them worked. Compare that to this last week, where we had light volume, two good trading days, one that was unexciting, and one where volume was so bad that I didn’t even trade.

However, the point of this article isn’t that trading is better with volume. We already know that. The point that I want to make here is that in this year, 2012, we’ve seen volume play out a little differently, and traders should take note.

It used to be that if volume was around 250 million on the NASDAQ after 30 minutes, it would probably be fairly close (plus or minus) 450 million after 60 minutes, and that was good for trading. That would take us somewhere near a 2 billion share day. So the idea was that if volume was over 250 million on the NASDAQ after 30, you would probably get confirmation of good volume by seeing a reading over 450 million after 60, and that would put you over 2 billion shares for the session, which increased the odds that our trades would work.

This has changed recently.

The difference lately is that we have actually seen several days where volume is close to 250 million early, but comes in nowhere near the 450 million share mark after 60 minutes. We then end up way short of our 2 billion shares for the day mark. This means that checking volume after 30 minutes isn’t representative enough of what we need to know. The 60 minute check is more important.

Here’s the last week (Monday was a Holiday, so Tuesday through Friday) in NASDAQ volume:

I’ve drawn a black line at 250 million shares. So after 30 minutes those four days, we were at 246, 223, 243, and 204 million shares. Three of those numbers are solid number, but we never got above 1.8 billion shares for any day of the week by the close.

In fact, the 60 minute checks were: 402, 386, 410, and 350 million. We consider anything under 400 million shares after an hour a “volume warning,” which means that the number is so bad, traders should be concerned. But here we are with three days during the week that looked fine after 30 minutes, but those same three days saw 402 (barely over the minimum for a warning), 386 (a warning), and 410 (best of the week and barely over the minimum). Friday was so awful that I dubbed it “XMAS VOLUME WARNING” after 60 minutes because we were only at 350 million, which is horrible.

Something has changed. What this means is that even if we get a “retail push” for market open, it doesn’t last past the first 30 minutes. What does this mean for trading? Is this the new norm?

No, it isn’t. When you look at the markets today, you’ve got the Yen not moving (until the last week) since the earthquake, you have the Euro in trouble due to the situation in Greece and beyond, you have the US Dollar in trouble since the downgrade of our debt since we couldn’t make an attempt to balance our long-term budget, and you have too much wealth in the hands of too few. There is a consequence for all of these issues, which is that the rich can’t make the market active on their own.

Volume requires participants, not just a handful of people with a bunch of money. When we see activity drop off as we have, we have to understand that there are broader implications. Will it last? No, markets come and go in terms of excitement and activity. Long-term traders (meaning people that make it in this industry, not people that buy and hold) understand that when volume isn’t what you want to see, you have to back off. You can’t force things to happen when they aren’t there and aren’t going to work.

Volume is critical, and the fact that we are seeing this strange behavior of near-decent volume after 30 but nowhere-near-decent volume after 60 minutes should be a lesson for professional traders not to overtrade and kill themselves until things normalize.

Have a good weekend.

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Our Stock Screens and How They Happen

Friday, August 26th, 2011

Tradesight has been around for about a full decade now, and every day since we started, we run our scans and deliver 5-20 stock entry points with stops in both the long and short side of the market. The process of doing this is fairly refined now. What used to take two hours each day (and couldn’t be started until two hours after the stock market closed when the data was fully available) now takes less than 30 minutes.

For those that don’t understand the process, we have about 10 screens that we run on the daily charts of the entire database of US stocks based on different underlying technical parameters. These screens (5 long and 5 short) generate a list that can be anywhere from 30 to 300 stocks a night, and then we go through these manually, looking over the charts, and make decisions about which 5-20 qualify to be on the report for our subscribers.

The reason that I’m writing this today is to discuss the impact of wild market fluctuations, such as what we have seen recently, on these screens. In a stable market, ideally we like to find long and short ideas each night. Obviously, you can wake up any day, and the market moves up or down, so you want to have plays in both directions. As the market remains generally stable overall, we do tend to find picks both ways. We prefer to short weak stocks on the premise (and a correct one, I might add, statistically) that they might head lower and to go long strong stocks because they tend to continue higher. We then use market direction during the day to support our entries.

When markets fluctuate wildly, it has an impact on what our screens generate, and the reason is somewhat simple. When the S&P and NASDAQ take a 15% hit in a short period of time, almost everything gets hit. There are very few stocks that are left in the top end of their range that could be considered for breakout formations and upward movement. Two weeks ago, I literally ran all 5 of my long screens and got a total of 2 stock ideas…and both were stocks that were so thin that I would never list them even if their patterns were perfect, which these weren’t. We have a lot of subscribers trading big money through Tradesight, and they don’t appreciate being directed to stocks that trade so little volume that they can’t get in and out for size at will, especially at our specific triggers.

Likewise, after the market bounced sharply off of the lows after the VIX spike over 40, we quickly ended up in a scenario where several of the screens on the short side weren’t generating picks.

There is a reason that we also deliver trade calls during the trading session. When markets gap, it can ruin our calls from the report. We had a few days over the last month where we only had long ideas or only had short ideas because the market was too strong in that direction and plays in the other were non-existent. If I list 5 long ideas and the market gaps down 30 points on the S&P, those calls probably are useless. You have to “call it from the tape” as they say, which is something we do every day anyway. We keep subscribers focused on market direction and find intraday pattern setups.

In an environment such as this, with so much uncertainty in the world and the market wildly swinging, the one constant is that my screens are only turning up a limited number of calls…in EITHER direction. That means that until things stabilize and stocks can get back into better basing patterns to establish entry points, we will have less calls on the report and look for more intraday.

We’re entering the 10-year anniversary of Tradesight, just over six months away. We will be sharing some of these insights here in the Blog along the way. Check back frequently or follow us on Twitter to stay updated. Also, please note that if there is a specific topic that interest you daily, you can come to this blog and click on a keyword in the word cloud on the right and just pull up the articles that relate to that topic. Topics that are covered frequently show up as bigger fonts in the cloud.

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How Can Options Unraveling Make You Money

Friday, June 17th, 2011

We just completed options expiration week, and triple expiration at that (options, index futures, and commodities).

On item that I try to point out every options expiration week is the importance of options unraveling, which typically occurs mid-week, most commonly on Wednesday. What is unraveling? It’s the point where the big players close out their options positions that are in the money as time is running out. This has big implications for moves in the market, and it therefore often causes the biggest move of the week.

The key to making money off of this phenomenon is to understand what it is, then to know when to expect it, then to identify when it is occurring, and then to take advantage of it by increasing your odds.

The secret to unraveling is the following: when it happens, the market picks a direction sometime after the first hour of play, heads that way on volume, and never really reverses. In other words, if you see unraveling happen, you know what direction to stick with all day long.

So, that’s what it is.

When do we expect it? Usually mid-week, most commonly Wednesday, of expiration week, after the first hour. So, that’s when I watch for it.

How do we know we get it? A move will start, and VOLUME WILL REMAIN HIGHER THAN NORMAL midday.

What do we do once we spot it? Have great confidence in sticking with that direction into the close.

Here’s Wednesday with the first hour boxed off on the broad market futures after a gap down:

So from this point, if we’re going to get unraveling, we should see a move begin to occur and volume stay up. Do we get it? Here’s the shot after another 30 minutes:

Note that we are breaking lows at a time of day where things are usually slowing down, and volume is up. But, that could be just one bar of volume, does the volume hold? Let’s jump a little further ahead and compare the volume midday to what we saw the prior two days:

Yes, indeed, volume is staying up as the market is selling off.

So, we expected it on Wednesday, now we have it, what do we do with it?

Well, the unraveling move is down. Most other days recently, we have seen a return to the midpoint of the session after lunch on light volume. I wouldn’t expect to get that move now. I would focus on any rally failing and looking for shorts.

So as we come back from lunch, the market starts to tick up. I told subscribers that I didn’t think we’d get back up to the midpoint with the rally:

And, in fact, we did not. Everything failed as expected:

What does that do for me? It keeps me looking for short entries throughout the second half of the day with little concern that that is the correct direction. I focused on AMZN:

And SINA:

Both of which worked great.

Sometimes, trading is that easy, and you need to focus on those easy moments. Unraveling only happens once a month (and sometimes, it really doesn’t happen at all in any convincing fashion). Still, when it happens, we expect, identify, and then act with confidence.

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Trend Changes, Trading, and Choosing Sides

Friday, March 11th, 2011

One of the key learning experiences if you want to become a professional trader is how the market changes character at “trend change” points. I wanted to spend a little time this weekend talking about that.

Here is a look at the S&P 500 daily chart with the key uptrend line that we have been tracking:

When you have an obvious uptrend in place, there are a few things that I try to teach people to focus on. First of all, it isn’t our job to guess when the trendline will break. Stay with the trend until it does. Second, a lot of the easy money will occur late in the trend IN THE DIRECTION of the trend. In other words, if you start trying to “get short” as the market pushes up like that, you miss a lot of big moves by leadership stocks that are continuing to base and breakout or rallying late in the day often.

The difference between being in an uptrend and in a downtrend is pretty simple. In an uptrend, you want to be buying the strongest stocks coming out of key patterns. The market will more often gap down and rally. The late day action will more often be pushes to the upside as mutual funds continue to buy. In a downtrend, the opposite will be true. You want to be shorting weak stocks. You’ll see more gaps up with sell offs. You’ll see more rallies fail and late day selling.

Remember that it really won’t be until you have firmly established the downtrend that you can expect to see consistent and nice short patterns to use to make the easy money shorting the market. Just like it takes a while after an uptrend begins for the new leadership to become clear, it also takes a while in the downtrend before the patterns are there where you can say “Here’s a stock that has been basing near relative lows for 4-6 weeks, let’s short it on a breakdown.” But that’s where the easy money comes in.

However, it’s usually right around the time that the market is truly going to break the uptrend (and vice versa) line that trading becomes a little less consistent overall compared to what we see during the trend. For example, if you look at the dip that occurred at the end of January on the chart above, the reality is that after two days of pullback, the market was already ready heading back up, and the leadership stocks gave you great opportunities. That’s why you don’t want to get wrapped up in the short side prematurely.

Meanwhile, the last two weeks, we saw a lot less consistency on the long side and more trades than usual not work even with intraday market directional support. If you go back through the logs, in January and most of February (and even before that); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES we barely had any days where less than 50% of our trades that triggered with market support worked. And more than 70% of the trades that triggered were on the long side. In the last two weeks, we’ve seen a couple of days where less than 50% of the trades that triggered with market support (granted, in BOTH directions) have not worked. I think I counted 3 out of the last 10 days under 50% winners. That’s not what we’re used to, but it is a sign that the trend was weakening and that the market battle from both sides was leaning into neutral territory more, instead of a situation where the bulls were dominating.

Quite simply, trend changes are battles, and the easiest money in the market isn’t made when the two camps (if you will) are battling and the previous loser is starting to gain strength. The easy money is when one side is in charge as long as you stick to the rules and trade in their direction. Remember, when it comes to being a successful trader, “We’re Switzerland,” as they say. We’ll join either side that’s winning. Not my job to be either camps biggest fan or treat them like the home team. I am my own home team, as you need to be as well.

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Top-Down Stock Selection

Wednesday, January 5th, 2011

This live on-line presentation will be given by David Nesson of Tradesight.com and will highlight his process of top-down stock selection using Daily, Weekly, and Intraday charts. David will focus on techniques that he has employed for two decades to determine the proper time to buy and sell with optimum risk/reward. This introductory course will focus on key basing formations as the first step in patterned technical daytrading. Often, investors make purchases in fundamentally sound companies based on recommendations or emotions. With the tools that will be covered in this segment, traders will be better equipped to make these crucial timing decisions in the future.

This course will be given in MB Trading’s MBT World/University. You can register for the event here. The event will be at 7 pm EST / 4 pm PST.

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Day Five of Stocks/Futures Revised Course

Monday, January 3rd, 2011

This will be the fifth day of the newly-revised Stock and Futures course. It will be given on-line and will cover the Futures Levels and how to use Futures in your trading. Times are in EST. This is part of the $1497 course.

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Day Four of Stocks/Futures Revised Course

Monday, January 3rd, 2011

This will be the fourth day of the new course and will cover the trading of active stocks like GOOG and AAPL. Times are in EST. This is part of the $1497 course.

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Market Preview for 1/4/11

Monday, January 3rd, 2011

The SP added 12 handles on the day and most of the advance was from the overnight gap. Price settled in the lower half of the traded range which leaves an awkward candle on the chart. Price action could be flakey for a couple of days until either the gap proves itself or fills.

For some added perspective below is the long term weekly chart of the SP futures. Fibs have been applied from the 2008 high to the 2009 swing low.

Naz was higher by 34 and used the prior high for intraday support. Set an alarm for a break under 2238 which gets price into the gap.

The multi sector daily chart shows the banks are coming on strong:

The NYSE cumulative A/D line has broken out to a new high which is the positive equity correlation that bulls need to see. There is no divergence at this time.

The BKX was top gun breaking through the 62% fib. 55 is the next trade-to-target.

The airlines are at the midpoint of a falling wedge consolidation pattern. Set an alarm for a break over 49 in the XAL.

The biotechs are still trapped between the 10ema and the measured move resistance.

The SOX tested but couldn’t break through the key 420 level. A break back under 405 could be a notable rejection of the new high. The MACD looks sloppy.

The OSX was lower on the day, notably underperforming the broad market. The Seeker exhaustion signal remains active until the risk level is broken.

The XAU was the worst performing sector of the day. Monday’s price action left an outside day down candle on the chart. The Seeker exhaustion signal is still active.

Oil still near range high on the chart:

Gold was lower on the day:

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Forex and Stock Market Preview for Last Week of December

Sunday, December 26th, 2010

Cautioning traders about rough environments has been one of the cornerstones of Tradesight’s approach over the last decade. A lot of newer traders get so excited about trading that they don’t recognize that not all days are equal and provide equal opportunities. The Holiday season is one of those periods.

While we saw some light action last week, the outlook for the final week of the year is even worse, though it might not be apparent to the novice’s eye. Some people assume that the banks have shuffling left to do for the rest of the year, but the reality is that most of that is done. In the stock world, the funds and banks have the positions that they want to show for their end of year statements. They can’t move massive positions in a day or two, so they can’t wait until December 31. All they want at this point is price stability.

Add to that the fact that a lot of retail traders are on vacation, and this year, much of the East Coast is blanketed in the worst blizzard in half a century, and there are ample reasons that nothing great will happen. The last week of the year typically sees a 20% drop-off in stock market volume on average from the rest of December, and December so far has only averaged 1.7 billion NASDAQ shares, which is already 300 million lighter than normal. A 20% drop takes us down to 1.5 billion or less. It is often said that 800 million shares of trading volume each day is just institutions trading back and forth to each other with automated trading, so the real difference between a 1.4 billion share day and a 2.0 billion share day (the average over the last few years) is really the difference between 600 million and 1.2 billion in real trading, and that’s a big difference. You don’t see good trading activity without the volume.

Meanwhile, in the Forex marketplace, activity is about the banks, and the reality is that even though the United States doesn’t know how to relax and take a day off, the rest of the world does, and much of the rest of the world is just as relevant to overall activity and volume. US rules state that the US Stock Market and Banks must be open on December 31 for a full day unless it is a Saturday or Sunday. This is because 70 years ago, people needed the full day to be able to make final adjustments for the tax year. It’s an outdated rule, and because of it, we don’t close, but we might as well. Let me give you a preview of the week globally.

Monday:

New Zealand, Australia, Great Britain, and Canada all half full day bank Holidays to continue observing Christmas. Without them, the Forex market is not going to be active.

Tuesday:

The same four continue to have bank Holidays. Remember that while New York is active for trading and banking, Great Britain is the center of Forex. Meanwhile, the snowstorm on the East Coast also crushes New York.

Wednesday:

No bank Holidays. There also isn’t much for economic data.

Thursday:

No bank Holidays, but it is the day before New Year’s Eve and people are already heading out to get where they want to be for New Year’s.

Friday:

Japan, Italy, and Germany have bank Holidays for the New Year, although the rest of us, including the US, save the bank Holiday for Monday (even though the stock market will be open).

So realistically, it’s Tuesday of next week (January 4) before the world is all back to work, and we might see Forex pick up then. Stocks usually take until day THREE of the New Year, so expect that Thursday, January 6, and it could be to the downside pretty hard if the first three days are up.

Meanwhile, the benefit of being a trader is being able to take time off and enjoy life and family when the markets aren’t doing anything. As much as we hope to see you in the Trading Lab, there probably won’t be much to see there.

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Stock Calls Recap for 12/16/10

Thursday, December 16th, 2010

With each stock’s recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.

INFY gapped just over the trigger, so no play unfortunately, because it ran another two points after.

PDCO triggered long (with market support) and worked:

In the Messenger, Rich’s RIG triggered short (without market support) and worked some:

His AIG triggered long (with market support) and worked:

BIIB triggered long (with market support) and worked great:

Rich’s CELG triggered long (with market support) and worked great too:

Rich’s AAPL short triggered in the afternoon (without market support and worked a little):

GS triggered short (without market support) and didn’t work:

Rich’s MA triggered short (without market support, but this was a news/energy play) and worked great:

Adds up to four triggers with market support, and all of them worked.

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Volume, Holiday Volume, and Volume Warnings…

Thursday, December 16th, 2010

Volume in the broad market is a very important measure of market interest. On days when you don’t have enough volume, a lot of stocks will have a difficult time behaving technically, and we need them to behave technically to trade them properly. Therefore, it is extremely important that we have a measurement to look at early in the trading session that gives us an idea of whether a lot of people are trading or if we’re alone.

Since we trade a lot more technology and NASDAQ stocks than listed stocks, I have always used the NASDAQ volume as a guide to my trading. I look at the 30-minute and the 60-minute mark of the session to see how volume is going. Over time, I have made minor adjustments to the numbers that I like to see, but currently I use 250 million after 30 minutes and 450 million after 60 minutes as my guides. Those are average numbers, meaning you can expect average activity in the markets if you hit that level or higher, and that is good enough for trading purposes. Anything significantly under those numbers is trouble, and your trade size should be lowered accordingly.

If you hit 250 and 450 at the 30- and 60-minute marks, respectively, the market is typically on-track for a 2 billion share day of NASDAQ trading, which is good, average volume over the last several years.

What are examples of days that tend to have less volume than usual? Summer Fridays. Days before key news. Holiday periods.

Because this information is so important, we post notices to the Stock feed of the Tradesight Messenger right at 10:00 am EST and 10:30 am EST to let our subscribers know how volume is tracking. In addition, these items are posted to our Twitter feed.

The last few weeks of the year are typically characterized by lighter-than-normal volume due to the variety of Holidays around the globe. The last week of the year, in particular, typically sees a 20% drop-off in volume and many traders take that week off. However, even earlier in December can see lighter volume, so it is important to pay attention and track this number. We are currently experiencing light volume, despite the fact that this is triple expiration week in December. Usually, volume drops off AFTER this Friday, but we saw only 1.7 billion NASDAQ shares the last two days, which is very light.

If the volume after 60 minutes is less than 400 million (which is not close to the 450 million average number that we like to see); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES we try to post a humorous title for the volume warning in the Messenger, just to give people a little something to chuckle about since the market isn’t that interesting.

Be sure to track volume and adjust your trading accordingly. The market doesn’t care about you, but you should care about the market if you want to be successful.

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What Lies Ahead for December…

Friday, December 10th, 2010

As we head into the end of the year and the Holiday season, I wanted to give an overview of what the last three weeks of the year will look like from a trading perspective. One of our main focuses as traders is to apply ourselves the hardest when there is volume and activity. Without those, the chances of trades working diminishes. December has a lot of components, especially in the last three weeks, so let’s talk about some of the broader points and then we’ll paint the picture.

1) Fourth quarter triple-expiration. Next Friday, December 17, is final expiration for the year for commodity, index futures, and options. Many people underestimate or don’t understand the impact of expirations in general, particularly options, but a triple-expiration (quarterly) is always a big deal. Being the end of the year, a lot of hedge fund money will be playing out their endgames leading up to expiration.

2) End of year tax considerations. The last possible trading day of the year, even if it is December 31 during the week, is a full trading day. This was originally done because the exchanges needed to make sure everyone had a full day to close their positions for the year. In today’s world, it is unnecessary (if Christmas Day is a Thursday, we get Thursday off and a half day Wednesday, but not the same for New Year’s). Still, regular rules apply. Stocks that are up a lot for the  year tend to keep rising into the end of the year because the sellers don’t want to lock in the tax gain until 2011.

3) Vacations. People tend to take them starting December 23rd. Some last through the 26th, some last through the end of the year.

This year, the last day of the month is Friday the 31st, so we have exactly three weeks left. Let’s go through how they will likely play out.

Week of December 13-17. Next week should really be more interesting than the last two. Hannukah is behind us, which often slows down volume for a bit. This will be the week of triple expiration. That means a lot of position unraveling will occur between Tuesday and Thursday, with one of those days (statistically, Wednesday) seeing the biggest range of the week because of it. We also have the last Fed rate announcement of the year on Tuesday (so Tuesday could be a little light, and everything gets packed into Wednesday and Thursday); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES plus CPI, PPI, Industrial Production, Capacity Utilization, Philly Fed, and Leading Indicators, just to name a few. I know that I will be paying a lot of attention on Wednesday and Thursday in particular. Friday will see a lot of volume, but probably not much movement, as options and everything expire near their strikes.

Week of December 20-24. This is where things start to slow down. All of the economic data for the week is coming out Wednesday and Thursday, but none of it are critical numbers. Monday will be a dud as it is the first day of a new options cycle. If there is a high point to the week, expect it to be Wednesday. People start to head out Thursday. Since Christmas Day is Saturday this year, we get the whole day off Friday (Christmas Eve). In a lot of ways, I would expect Wednesday, December 22, to be the last day of the year that retail traders make “position decisions.” Then they head out for the Holiday.

Week of December 27-31. The last day of the year typically sees a 20% drop in volume on average. A lot of professionals take it off. At best, you should expect to play “hit and run” in the first 60-90 minutes. Our analysts don’t always come back for the second half of the day. This is also where end of month, end of quarter, and end of year “window dressing” takes place. The funds already have their positions to show and their stocks in place where they want them. They don’t let them move much, and there isn’t enough retail activity to make that happen.

That should help you plan a trading road map for the rest of the year. Obviously, anything can happen, but that’s the most typical expectation.

By the way, since New Year’s is Saturday, January 1, and the stock market has to be open in full on December 31 (Friday); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES even though no one shows up, there is NO OFFICIAL stock market Holiday for New Year’s Day this year. The stock market is open on Monday. However, banks are not, so it will be a dud first trading day of 2011. And in a later Blog, we’ll discuss the “first three trading days of the year phenomenon.”

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Tradesight Market Outlook for 11/30/10

Monday, November 29th, 2010

First touch—Monday was the first interaction with the 50dma (red) since the first trading day in September. This will be an important area of interest for days to come. The 50 should provide support when it’s first tested and would be a strong confirmation of a change in trend if lost. There are a couple of ways to look at the recent trading action. The bull case is that price is consolidating in the area of the prior high (April) possibly making a handle to breakout. The bear case is that the “look see” above the April high was a failure and the price pattern is making a head and shoulders supported by the MACD sell condition. Time will tell but for now the 50dma is the big man on campus.

Naz closed the gap from last week and was unchanged on the day. Note that there is still one open gap open just under the 2100 level.

The NYSE cumulative A/D line took a pretty good whack last week. The current area of interest is the breakout level at about 1525. This is key support and the loss of 1525 would indicate a failure.

The 10-day Trin remains oversold at 1.36 which implies that the market has available energy for upside movement.

Multi sector daily chart:

The OSX was the top sector on the day. The pattern still has cup and handle potential so set an alarm for a break over 230.

The BKX was stronger than the market, finding support near the old lows. Price has been boxed up for about 4 days so a breakout of the pattern could be strong.

The SOX was slightly higher on the day gearing up to challenge the old high. Note the maturity of the current SEEKER countdown at day 10.

Oil was very strong and will surely breakout if the OSX makes new highs:

Gold continues to hover perhaps tracing out a head and shoulders. The first clue will be the loss of the 50dma.

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Market Index Preview for 11/18/10

Wednesday, November 17th, 2010

The SP posted an inside “measuring” day. This is very typical action following an impulsive move such as the prior candle. Just like 2 days ago, the pattern has energy stored in the pattern and can move forcefully when the range is resolved.

Naz also posted an inside day which has the same implications as the pattern in the SP. The static trend line (red) and then the April highs are the nearby support levels.

Below is the very long term monthly chart of the NDX100. There is a very key area just overhead. This is both resistance and a major breakout level. Set an alarm for 2239.

The financials remain very weak vs. the other major sectors.

The OSX was top gun up 3 on the day. If things play out the pattern could be setting up a cup and handle.

The XAU was little changed, posting an inside candle. The GDX etf closed at $58 which could be the strike peg for expiration and trap price.

The SOX used yesterday’s low for support. Set an alarm for a break under 372.25 which would be a bearish continuation.

The computer hardware index, the HWI, settled below the 50dma. With the SOX weak, this needs to be watched closely.

The BKX was the last laggard. Price is back below both the 50 and 200dmas likely just basing.

Oil suffered further liquidations. 80 was the low of the prior trading range so look for support there.

Gold did very little but notably outperformed most other commodities (cotton was limit down). Keep an eye on the key support around 1320 (static trend line).

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Tradesight Market Preview for 11/11/10

Wednesday, November 10th, 2010

On a closing basis, the SP reclaimed 4 handles from yesterday’s tankage. Price is still boxed up in the recent range with Wednesday’s low not quite closing the open gap below.

Naz posted a wide ranging day with little change. Post market, the CSCO earnings and guidance were disappointing and the Globex futures have declined to the Wednesday low. There will be a gap to work with for Thursday’s Veterans’ day session.

Multi sector daily chart:

The XAU was top gun up 2.4%. While this is favorable for the bulls, price didn’t record a new high and there is still a bearish candle at range high.

The BKX was up 2%, the 200dma remains the break level.

The OSX closed at a new high on the move, and just shy of a new high close for 2010. Keep in mind that this could be a double top and need some order of retracement.

BTK remains boxed up:

The SOX remains between fibs and is still badly lagging the performance of the NDX100.

Oil broke to new highs for 2010:

Gold is one gap down away from a selling episode; it’s just a question of from where it happens. Here or much higher after a blow off?

The VIX is now 5 major waves down:

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Stock Picks Recap from 11/04/10

Thursday, November 4th, 2010

With each stock’s recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.

SYNA opened at the trigger, pulled back to fill the gap, then triggered (with market support) and worked:

NTRS triggered (no market support due to opening five minutes) and worked:

FITB gapped over, no play.

In the Messenger, Rich’s BIIB long (with market support) triggered and worked:

GS short (without market support) didn’t work, but the long (with market support) did:

WFMI triggered long (with market support) worked:

Rich’s AAPL long (with market support) worked for over a point clean:

AMZN triggered short (without market support) and had a rough start but ultimately worked (was against the market anyway):

And Rich’s FCX long (with market support) worked:

That totals six triggers with market support, all of them worked.

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Stock Market Index Preview for 11/4/10

Thursday, November 4th, 2010

The SP moved to another new high adding 4 on the day. Price settled right at the risk level from the exhaustion signal. If that level gets taken out, then the April high of 1216.50 is in play.

Naz was higher by 14 decisively closing at a new high. As of today’s close, the pattern is 9 days up completing the 9-13-9 pattern.

Multi sector daily chart:

The BKX was top gun up 2% on the day. A DTL (red) had been added to the chart. This defines the current down trend. A close above the DTL will be the first indication of a reversal. Confirmation would be a settlement above the 200dma (aqua).

The SOX settled right at the static trend line. The pattern is at key resistance an has just completed a 1-9 setup.

BTK was slightly stronger than the broad market but remains range bound. There is nothing new technically because it didn’t close above the prior high of the move.

The OSX was higher on the day but didn’t trade above Tuesday’s high. Today’s candle recorded the 13th bar of the exhaustion run. A price flip or close under the 10ema will validate the sell signal.

The XAU was last laggard and was a source of funds. This is a very crowded long trade and needs to be monitored for short opportunities.

Oil broke above the prior high:

Gold was lower on the day with the 13 exhaustion signal still on deck.

The big action on the day was in the bond market. Following the FOMC announcement, the bonds got hit very hard. In the chart below the TLT which is etf for the long dated US Treasury bonds broke to new lows and had a huge volume spike. Money rotating out of the bonds and into stocks would be a very important development. The money flows into bonds has been huge while there has been no money flowing into stocks.

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Tradesight Market Preview for 11/03/10

Tuesday, November 2nd, 2010

The SP made a new high and new high close on the move adding 10 handles. The 13 exhaustion signal is still active until price exceeds the risk level (magenta). Expect a gap tomorrow morning after the ADP number is released premarket.

Naz advance 21 making a new high on the move. The Seeker is 8 days up in a new setup which means that if the pattern prints the 9th candle the chart will have a 9-13-9 in place. The typical setup for a reversal is just the 1-9 setup phase, followed by the 1-13 countdown phase. After the completion of the two phases price will usually reverse. However, sometimes in a very bullish move, just the two phases are not enough to reverse a very strong trend. This is when the first two phases need reinforcement from a third phase. A third, reinforcing phase is about to complete and will do so as soon as the 9th green bar prints and completes the third phase of the run.

Multi sector daily chart:

Just for perspective, take a look at the very long term monthly chart of the Dow. The Dow has major, major resistance at the 11,500 area. At all three points on the chart, A, B and C this area is stiff resistance and is also the real breakout. A new secular bull market will be in the delivery room above 11,500 and born when a new high above 14.192 is recorded.

The OSX was top gun on the day, plowing new high ground. The next level that will come into play is the 2009 high just overhead.

Nothing much to take away from the action in the BTK, the pattern is still range bound.

The Dow Jones transport index is right at the prior high. The Dow Theory crowd will be monitoring this closely.

The SOX posted a small gain on the day. Set an alarm for a break over the Q2 highs 377.50 (arrows). Since price is coming into a static trend line and is also 8 days up, this is a very likely area for some corrective activity.

The XAU is now 10 days up in the exhaustion countdown.


The BKX was last laggard and remains a source of funds. Keep in mind that when the dollar sees some strength again they will come for the bank stocks.

Oil closed near the high of the recent range and also recorded a new high close for the move.


Gold continues to grind in the area of the retest of the prior high. The 13 exhaustion signal remains on deck.

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Tradesight Stock Picks Recap for 11/02/10

Tuesday, November 2nd, 2010

With each stock’s recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.

The market was so flat today that just about everything could be viewed equally as having or not having market support since nothing happened at all.

ASIA triggered (with market support); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES worked great:

TTWO triggered (with market support); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES was working, no problems, but ran out of time:

In the Messenger, Rich’s NFLX (no market support due to triggering in opening 5 minutes) worked nice:

COST triggered short (with market support) and didn’t work:

Rich’s FTNT triggered short (with market support) and worked:

His WYNN long triggered (with market support) and worked, although late in the day:

So the results once again, 5 trades triggered with market support, 4 worked.

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Tradesight Stock Picks Recap from 11/1/2010

Monday, November 1st, 2010

With each stock’s recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.

MRVL triggered long (with market support) and worked enough for a partial:

QCOM triggered long (with market support) and also worked enough for a partial:

RIMM triggered short (without market support) and worked great:

AMGN triggered long (with market support) and worked great:

Rich’s NFLX triggered short (with market support) and worked great:

His ITRI triggered shrot (with market support) and worked enough for a partial:

GS triggered short (with market support) and worked:

In total, six triggered with market support, and all 6 worked (3 just enough for a partial and 3 very well). 100% day, plus the RIMM worked too.

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Tradesight Stock Picks Review from 10/29/10

Sunday, October 31st, 2010

With each stock’s recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.

Hard to measure market direction on a day that was so flat and inside a 5 point range on the ES, but we will use the tool and go from there.

NVLS triggered long (with market support) and worked:

XRAY triggered short (without market support) and worked enough for a partial:

In the Messenger, Rich’s FSLR (with market support) triggered long and worked for over a point and a half, which is more than enough for a partial:

GOOG short (without market support) worked:

GS short (without market support) triggered late in the day and worked:

Rich’s V long (with market support) worked:

In total, three trades triggered with market support and all three worked despite the slow session.

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Tradesight Small Cap Picks Review for Fourth Week of October

Friday, October 29th, 2010

We had three trades trigger off of the Small Cap report for the second half of the week. Two worked great.

VLNC didn’t work:

ANAD worked terrific, nice move for a $6 stock:

TQNT worked great too, clean move:

There are three calls for the new report to start November.

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Tradesight Stock Picks Review for 10/27/10

Wednesday, October 27th, 2010

With each stock’s recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.

VRTX triggered (without market support) but ended up working fine once the market did turn up in the afternoon:

ASIA triggered long (with market support) and worked for more than an easy partial:

PRWD triggered (without market support) and didn’t work:

CAVM triggered (without market support since it was in the first 5 minutes of play) and worked, including a huge move in the afternoon:

ADTN triggered short (without market support) and worked, especially once the market turned to the downside a little later:

In the Messenger, AMGN triggered (with market support) and didn’t work (we need $0.20 for a partial, didn’t quite get there):

COST triggered short (with market support) and worked:

AMZN triggered short (with market support) and worked:

Rich’s EQIX triggered short (with market support) and worked for $0.50, an easy partial:

His NFLX triggered short (with market support) and worked great:

His FCX triggered short (with market support) and worked:

A beautiful pattern in EBAY waited until the last 6 minutes to trigger, so we won’t count it:

No other calls triggered. That totals seven trades that triggered with market support (those are typically the ones we suggest taking) and six worked at least for a partial, most of them much better.

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Tradesight Stock Picks Review from 10/26/10

Tuesday, October 26th, 2010

Off the report, ROST triggered (with market support) and went enough for a partial but that was it:

GPRE (with market support) did a little better and stayed in the money all day:

AVGO (with market support) also worked fine:

TIVO (with market support) didn’t work:

GSIC (with market support) worked:

XRAY (with market support) didn’t work:

MBFI (without market support) didn’t work:

In the Messenger, COST (with market support) worked:

FSLR (with market support) didn’t work:

AIG (with market support) triggered very late, worked, but didn’t have time to do much:

AMZN (with market support) worked enough for a partial:

As usual, we sum it up comparing the win/loss ratio on the trades that triggered WITH market support. Ten trades triggered with market support. Seven of them worked, three did not. Only a couple of the trades went far in a dull day in the market after the first hour.

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Tradesight Stock Market Preview for 10/26/10

Monday, October 25th, 2010

The SP gained 2 points on the day. Some possible technical damage was done because the day’s candle settled under the opening price. This is always a cause for concern at range high which is the current condition. The 13 exhaustion signal is still active since the risk level (magenta line) remains unchallenged.

Naz advanced 4 handles but like the SP, it has the same potentially bearish condition. Price was higher on the day but settled below the open. This price pattern is sometimes known as a camouflage sell signal.

Multi sector daily chart, note the relative weakness of the banks:

The XAU was top gun, up 3 on the day. Since the price channel has suffered a downside beak, the chart is short-term bearish until new highs are recorded. The May highs would be a reasonable retracement objective.

The SOX was the standout performer for the Naz side. Price broke above the recent highs and held most of the gains on the day. The 2009 high is the next price objective.

The OSX remains trapped the recent price range. There is nothing new technically but the lack of performance in light of Monday’s weakness in the $US is of concern.

The BKX continues to feel the wrath of the weak dollar. This group continues to be a source of funds. Index member and financial leader BAC recorded an new 52 week low.

Oil remains boxed up:

Gold has retreated back into the price channel but has yet to settle below it. Until the price channel is broken, the recent price action is corrective and not a reversal.

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Tradesight Stock Trigger Recap for 10/25/10

Monday, October 25th, 2010

It was one of those sessions where everything that triggered worked, even without market support.

Off the report, our Top Pick ADSK (with market support) worked great:

ATHR gapped over the trigger, no play.

In the Messenger, RIMM (with market support) worked great:

AMZN (without market support) short worked great for the gap fill:

There were several other calls made, but none of them triggered in what ended up being a flat afternoon. So that’s 2 for 2 nice winners that triggered WITH market support.

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Tradesight Stock Triggers Recap from 10/21/10

Thursday, October 21st, 2010

As usual, this section of the report reviews yesterday’s trades. We note whether each triggered with or without our market support guidelines, and we recommend that people focus on trades that trigger with market directional support as those have the highest probability of working. We then summarize the results of those trades at the end of this section.

The top five long ideas off of the report all came within five cents of their triggers and DID NOT trigger, which is interesting and unusual.

BMRN (without market support because of first five minutes) triggered out of the gate and went enough for a partial, but would have been hard to get:

VLTR (with market support) triggered short, a partial, no risk, not much there:

Rich’s AAPL (without market support) triggered short out of the gate, went a point, so worked, but then reversed sharply:

Rich’s AMZN (with market support) triggered long and worked great:

FSLR (with market support) triggered long and worked great:

AMGN (with market support) triggered short and worked:

Rich’s FCX (without market support) was a slightly different style of play as he discussed in the Lab, triggered short and worked:

Rich’s second AAPL (with market support) trade triggered short and worked fine:

Rich’s FAS (with market support) didn’t work:

Rich’s WYNN (with market support) short worked fine:

Rich’s CREE (with market support) short, no risk, barely enough for a partial:

In total, that’s 7 triggers with market support. 5 worked great. 2 worked a little, no risk, just didn’t go anywhere. Not a bad week.

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Tradesight Stock Market Preview for 10/21/2010

Wednesday, October 20th, 2010

SP bounced back 11 handles on the session. The exhaustion signal is in place and the burden of proof is on the bulls. The MACD remains extended and is waiting to release some downside energy.

Naz was up 16 and managed to fill the Monday-Tuesday gap. This could be a key technical development since there are now no gaps left overhead.

Multi sector daily chart:

The top sector on the day was the XAL airline index, up more than 5%. Like the XAU a few days ago, price has accelerated up and away from the channel and is getting extended.

The XAU outperformed the broad market and was up 3 on the day. Technically this was just a bounce since price settled in the lower half of yesterday’s range. Also, price settled under the 2009 high.

The OSX has the same condition as the XAU settling in the bottom half of the prior trading range. One notable feature is that today the $US was almost as weak as it was strong yesterday. One could make the leap that equity traders pricing in $US strength, not more weakness that has been the dominant trend.

The SOX pivoted around the 200dma–nothing new technically.

The BKX was the real laggard on the day. This key index was much weaker then the broad market and settled below all the major moving averages.

The biotechs closed right at the recent range low. Monday’s advance could wind up being a wrong way break and an indication of failure. The next two candles will be key.

Oil still trapped in the recent range:

Gold bounced but never penetrated the upper half of the prior day’s trading range. The short term price action remains negative. If the lower price channel is penetrated, look out below.

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Tradesight Stock Trigger Review for 10/20/2010

Wednesday, October 20th, 2010

Here’s a list of all of our picks for the stock service from Wednesday, October 20. Each is denoted as triggering with or without market support. Tradesight recommends taking trades with market support. We were 7 for 7 today in those trades.

Off of the report, only NDAQ (with market support) worked, no risk, but barely made it $0.20:

In the Messenger, RIMM (with market support) worked:

Rich’s CREE (with market support) worked:

Rich’s AAPL (without market support) short didn’t work:

Rich’s GOOG (with market support) worked for 3 points:

My AMZN (without market support) didn’t work:

My AMGN (with market support) went enough for a partial:

Rich’s WYNN short (without market support) worked for over a point:

Rich’s AMLN (with market support) worked enough for a partial:

Rich’s AAPL short (without market support) worked for over a point:

And GS long (with market support) was working but ran out of time, so just enough for a partial:

All told, that’s seven triggers with market directional support, which are the ones that we take. Three worked great, four worked enough for partials. None of the seven didn’t work.

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Tradesight Market Preview for 10/20/2010

Tuesday, October 19th, 2010

BANG! The correction begins. The SP broke hard, losing 14 on the day. In so doing, the 13 exhaustion signal has qualified. Price settled under the 10ema and also recorded a price flip. The price flip is noted on the chart because today’s close was below the close 4 days ago.

Naz lost 27 but did not record a price flip or settle under the 10ema. Note on the chart that the low of the day was right at the April high. This will be a very key short term area. A settlement under this area puts 2k in play.

Multi sector daily chart:

The BKX was one of the strongest sectors on the day. This is of only small comfort because how badly the index has lagged the broad market over the last couple of weeks.

The SOX closed under the 200dma and on the south side of the recent trading range. If price breaks under the DTL (blue) the 2010 low will be in play.

The BTK collapsed right back into the trading range. This means the recent breakout is still not qualified.

The OSX, in the crosshairs of rising interest rates in China, got hit very hard. The 200 level is near term support.

The XAU finally got what it had coming. A full fledged profit protecting whipping. This is a meaningful break. The May high and 50dma around 190 will be a key area and potential first trade-to-target.

Gold got crushed, down $35 on the day. If price crosses and loses the lower channel line, then the June high breakout is in play.

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Tradesight Stock Calls Summary from 10/19/2010

Tuesday, October 19th, 2010

We’re adding a new feature to this section of the report daily. With each stock’s recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.

KLAC (with market support) triggered long, didn’t quite go enough for a partial:

AMGN (with market support) triggered long and did:

FFIV (with market support) short worked great:

In the Messenger, Rich’s early SNDK (without market support) call worked for over $0.50:

His IBM (without market support) didn’t work:

My AMZN (with market support) long call worked nice:

Rich’s BRCM (with market support briefly) swept:

His RGLD (with market support) worked:

His NEM (with market support) didn’t work:

Our AAPL call worked long (with market support) and then my AAPL short (with market support) worked after lunch:

So out of the nine trades that triggered with market support, 5 worked big, 2 worked enough for a partial to become no loss, and 3 were small losses.

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Market Outlook for October 19, 2010

Monday, October 18th, 2010

The SP made a new high close on the move, adding 3 points to the intermediate rally. The 13 exhaustion remains active but has yet to qualify itself. To qualify the signal, price needs to either close below the 10ema or register a “price flip” by closing below the close 4 bars ago.

Naz was weaker than the broad market, losing a small fraction on the day. Price has settled above the risk level (magenta line) so if Monday’s high is exceeded by on tick the sell signal will have failed.

Multi sector daily chart:

The weekly cumulative NYSE A/D line remains very positive. This indicator usually leads price by weeks or months.

The 10-day Trin remains much closer to the overbought area than the oversold threshold.

The BKX was the top performing sector closing up 3%. The chart is still technically negative until price exceeds the recent range (approximately the 200dma).

The BTK has finally broken out of the trading range. Since a great deal of time was spent in the consolidation, there could be multiple days’ worth of price advance.

The OSX did little and is currently having trouble with the 210 level.

The XAU has declined to the bottom of the recent trading channel. If price begins to rollover and follow through then the recent static trend line will be in play. Note that the MACD looks vulnerable.

The SOX was the weakest major sector. Price continues to badly lag the SPX and NDX. Price broke out above the DTL but has been very reluctant to get upside momentum.

Oil had a strong day, especially considering the early strength in the US dollar.

Gold remains positive but very extended. A sharp correction could be very close at hand.

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Tradesight Stock Triggers from October 18, 2010

Monday, October 18th, 2010

No triggers off of the report, but a great session overall in the Messenger. Note that market direction matters…and it was UP all day (see below).

Rich’s BIDU out of the gate worked great:

RIMM short (against market direction) didn’t do much:

FSLR long worked great:

Rich’s FFIV short was a huge winner and the one short that worked despite the market (which is why we try them all and keep tight stops):

GS long worked great:

EBAY short (against market direction) didn’t work:

Rich’s FAS worked:

Rich’s CRM short (against market direction) didn’t work:

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Tradesight Market Preview for October 6, 2010

Tuesday, October 5th, 2010

For some perspective, let’s examine the very long term monthly chart of the Dow Industrials. The first thing that should jump out is the very well defined band of trading between 10,000 and 11,500. This is represented by the red band on the chart. On the left side of the chart, at point A, there was an extended period of accumulation that ultimately failed when the tech bubble burst. The ensuing collapse ran its course and price reentered the trading band at point B. In 2006 the Dow was finally able to breakout over the trading range to make new all time highs. The index churned, ultimately failed and then truly collapsed in 2008. Currently, price is back in the primary trading range with an upward bias. While the financial commentators may be bubbling with enthusiasm, market sentiment remains very negative. Alternative asset classes like bonds and gold are all at or near range high which means that the FOMC fire hose of liquidity is lifting all boats. If one is onboard with this thinking, is the Dow in a bull market or a bounce? It is unlikely that the Dow is in a new bull market until the trading band has been exceeded and confirmed by asset reallocation swapping from bonds and gold into equities. At present, the Dow Industrials have been in the trading range (red band) for about one year. The two previous penetrations at point A and point B lasted for 2 ½ years before leaving the range. And for those keeping score at home, the time spent above the trading band (green bubble) between 2006 and 2008 also lasted for approximately 2 ½ years.

Dow

The SP broke above the recent trading range and added 20 on the day to settle at a new high. The next area of interest is the 1165 fib.

S&P

Naz was up 41 on the day but neither recorded a new high nor a new high close. The MACD has turned negative.

NASDAQ

Gold stocks continue to outperform on the multi sector comparison chart:

Multi-Sector

The BKX was as top sector, performing equally with the XAU. The key sector was up 3% but did not break the recent range or record a new high close.

Banks

The XAU made a new high on the move but not a new all time high. Below is the long term weekly chart showing the fibs and prior high water mark.

XAU

The OSX was just short of a new high. Set an alarm for a break over 200.50.

OSX

The SOX, performing in-line with the NDX settled right at the 200dma.

SOX

The BTK could provide some setups. Price settled right at the prior range high. Monitor this sector for breakout trades.

Biotechs

Oil continued its pattern breakout, making a new high close on the move.

Oil

Following the quantitative easing from the central bank of Japan, gold exploded to a new all time high. The angle of assent has left the well organized channel and is beginning to get steep.

Gold

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Tradesight ES Winner Under S1

Monday, October 4th, 2010

This morning, we monitored the early action in the index futures without making a call as no clear pattern or setup emerged in the first 30 minutes that we could commit to. However, taking a step back and looking from a wider perspective, we called the short under the S1 level with a 7-tick stop. Notice how today’s blue S1 line was used on Friday by the market:

ES

The trade triggered short at A, we took half off for six ticks to build a cushion at B, and continued to lower our stop throughout the day until the trade closed at C for a 16-tick winner on the second half of the play.

Sometimes, patience is the best plan.

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End of Quarter Window Dressing Discussion

Thursday, September 30th, 2010

Markets are about reality, and what I mean is that you have to accept certain things about market behavior. For example, options expiration plays a key role during the week of expiration and on expiration Friday itself. To ignore that is to ignore key information that can help you trade better.

Another key reality is that the end and beginning of quarters tend to have certain characteristics for stocks and the indices. Essentially, the idea is that we commonly see the market go flat for the last couple of days of a quarter as the major funds have their positions placed and the market is largely sitting where they want it to for the end of quarter statements for clients. What is also important here is to realize that after the quarter does end, things start to pick up to make up for the fact that the market was artificially contained. Here’s an example of how this can look, and there is no magic formula for whether it will be one day or three days or five days.

This time, it was five days. Here’s the S&P 500 showing trading from last Friday through the end of this Thursday, which was the last day of September and Q3:

S&P End of Quarter Action

Basically, 90% of that week was in an impossibly narrow 9 point S&P range. We had a spike down Tuesday that returned to the main range and a spike up Thursday that did the same (both gave us nice opportunities, include several big stock winners on the gap down Tuesday and almost a 20 point winner on the NQ futures contract on the gap up Thursday.

This is not normal market behavior. You would be hard-pressed to find something similar that wasn’t either a significant holiday week or an end of quarter. The fact that this went a full five days is pretty amazing. It wasn’t apparent after Friday, the first day, and Monday was a disappointment, but after Tuesday, you had to see the rest coming.

Meanwhile, let’s look at how Q3 started back at the beginning of July. Note that the Fourth of July holiday was right at the start, so really the move starts after everyone gets back.

Beginning of Q3 on S&P

That’s a nice move and was very easy to make money in. 60 points in about 5 days.

So these things happen, but they don’t tend to happen at random times. The first days of a quarter are commonly good periods of movement (doesn’t have to be the very first day, but usually pretty quick). The end of the quarter can be slow, whether it be just a day or two or more. You need to understand that and factor that into your trading. I had a successful week because I saw this early and adjusting my trading accordingly. I focused on the opening 90 minutes and did well on the two days with the gaps, but was fairly picky beyond that.

Let’s look at the end/beginning of the last four quarters on a daily chart of the S&P:

S&P Daily

Point A is the end of 2009/start of 2010. The last week of the year is almost always slow with so many traders away and most people having done their buying and selling for tax purposes in advance. Meanwhile, note that we did start moving once January hit. That one isn’t rocket science as there are several factors going on.

Point B is the end of Q1/start of Q2. See how we went flat for a couple of days at the end of the quarter (almost a week); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES then ran when the quarter started?

Point C is the end of Q2/start of Q3. The end of Q2 was the exception, as the market was still moving around wildly until the last day of the quarter. But, as I already showed, we did move…up…sharply once the next quarter started.

Point D is now. We just suffered through five horrible days and came out unscathed. This next week is a good time to concentrate.

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Tradesight Stock Picks Review from Thursday, September 23

Thursday, September 23rd, 2010

NVDA opened just above the trigger, so no play, but worked great.

ESRX worked:

ESRX

AMCC gapped under the trigger, filled the gap, then triggered and worked:

AMCC

ATLS gapped under the trigger, no play.

CHKP gapped down but opened just above the trigger, swept, and that was that:

CHKP

In the Messenger, AAPL worked great:

AAPL

AMZN worked great:

AMZN

BIIB worked:

BIIB

Rich’s LVS short worked:

LVS

His AAPL short in the afternoon worked for almost a point:

AAPL

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A Night of Scalping…

Wednesday, September 22nd, 2010

Lots of little winners on calls and scalp calls based on what I said up front were pretty limited setups for the night. See GBPUSD, USDCAD, and NZDUSD below.

I put a note in the Messenger today, but I will repeat here. As we draw closer to the launch of the Tradesight 4.0 website, you will start to see some promotional emails and newsletters go out. There are two price changes on the new site (Swing and Forex). The main Forex service is going up $20 per month to $149. This will NOT affect current subscribers at all. You will continue to get the $129 rate indefinitely, as will anyone that signs up before the new site is in place (sometime before Halloween). Also, the Total FX package (the one that includes the Seeker/Comber for advanced active traders) will also go up $20 to $219. If you are currently an FX subscriber ($129 per month) and later want to bump to the Total FX, we will still allow that upgrade to the existing $199 price (instead of the new $219). No rush. This is not about current subscribers. This is related to some new relationships and items that Tradesight has recently entered going forward. We like you guys just the way you are. ;-)

New calls and Chat tonight.

24 Hour EUR/USD

EURUSD

24 Hour USD/JPY

USDJPY

24 Hour GBP/USD

Triggered long very early at A, hit first target at B and beyond. Added additional call later, triggered short at C, hit first target at D, second half stopped:

GBPUSD

24 Hour USD/CHF

USDCHF

24 Hour USD/CAD

Perfect Value Area move from A to B:

USDCAD

24 Hour AUD/USD

AUDUSD

24 Hour NZD/USD

Scalp Idea in the Messenger early yesterday evening triggered over UBreak at A, hit R1 exactly at B. Although that’s about all you want out of a scalp, just note how well it later used R2 at C:

NZDUSD

24 Hour GBP/JPY

GBPJPY

24 Hour EUR/JPY

EURJPY

24 Hour GBP/CHF

GBPCHF

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Stock Triggers Recap from August 31, 2010

Tuesday, August 31st, 2010

Here is a recap of the stock triggers from the Tradesight Stock Report and Real-Time Messenger for Tuesday, August 31, 2010. This includes all triggers.

Off of the report, SPRD worked nice:

SPRD

SNDK short worked:

SNDK

ASIA worked but triggered right out of the gate:

ASIA

CSTR went enough for a partial:

CSTR

In the Messenger, GS gave me a small winner, but finally gave up on it:

GS

COST went enough for a partial, that’s it:

COST

Mark’s BRCM worked:

BRCM

Rich’s V worked:

V

GOOG didn’t work:

GOOG

Overall, a very nice day to close out August.

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ES Classic Futures Calls with Value Area, Pivot, and Gap Fill…

Wednesday, August 25th, 2010

It’s been a slow week or two in the markets with volume on the light side and afternoon activity much flatter than normal. That doesn’t mean any one day can’t give you a surprise, and fortunately, Mark Likos spotted a classic ES setup today and called it for our subscribers.

The market gapped down in the morning and was mostly flat over lunch. It rallied up after lunch to fill the gap, hitting the Pivot (dark blue line); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES which was just above and inside of our Value Area Low:

ES 1

What does this set up for us? When a market fills a gap, it is the resolution of a necessary technical move (80% of gaps fill the same day). When they stall out at the Pivot, they are identifying that level (the “Balance of Play” from the prior session) as important. Those two items basically set a very specific wall and complete the energy move of the gap fill. This means that the market is now free to head either direction, but in this case, a move to new highs gives you a break above the Pivot now that the gap is filled, and it gives an entry into the open part of the Value Area. So, Mark called the long above that level, and the move worked perfectly to the other light blue line, which marks the high of the Value Area:

ES 2

These are the types of high-probability setups that we like to keep our subscribers focused on, even though they haven’t been happening as much in August. Don’t forget, wait for the market to do what you need, because it isn’t going to move how you want. Clean setup, one of the best of the week, and thus, a clean winner.

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Market Outlook for August 24, 2010

Monday, August 23rd, 2010

The SP lost 4 on the day, making a new low close on the move. Price is now below and moving away from the 50 and 200 daily moving averages. The recent MACD sell signal has been validated by the close under the zero line. 1061 is a Fibonacci level and also prior support. Treat this level as a pivot under which the momentum could accelerate.

S&P

Naz also made a new low close on the move. 1800 is near term support with 1750 next. Fibs have been added to the chart. Note that the MACD has closed below the zero line.

NASDAQ

The multi sector daily chart shows the relative weakness in the SOX.

Multi-sector Chart

The OSX was the best sector posting a small range inside day.

OSX

The BKX closed right at the lower edge of the trading range. This is the lowest close since February.

Banks

The BTK closed just above the key 50 and 200dmas. Look to this index for leadership if the market turns higher from here.

Biotechs

The SOX is gaming the lower boundary of the trading range. The leading index was weaker than both the broad market and Naz on the session.

Semis

Oil continues to slowly breakdown.

Oil

Gold continues to show good relative strength during a seasonally weak time of year.

This is the chart to watch. Until the SOX shakes off its relative weakness, selling rallies in stocks will be easier than buying the dips.

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August 16 Futures and Stock Call Review: How to Make Money in a Light Volume Day

Monday, August 16th, 2010

We had a nice winner today in our top long stock idea off of the report, ATHN:

ATHN

But, that really doesn’t tell the whole tale of how Tradesight helps you make money based on the market environment. Click on this link to get a presentation review of today’s trading. Just press the Play button on that screen. The presentation is about ten minutes and walks you through how our Stock and Futures services can help you make money.

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Tradesight Stock Market Preview for 5/5/10

Tuesday, May 4th, 2010

The SP broke decisively below the triangle formation losing 26 on the day. This is follow through to the 4/27 initial break. The short term trend is now down with 2 key levels just below at the 50dma and static trend line.

S&P

Naz was lower by 57 testing the 50dma and static trend line. The next meaningful support below those two levels is the January highs.

NAZ 100

Multi sector daily chart:

Multi Chart

The Dow/Gold ratio has plenty of room for gold to gain favor over stocks before hitting the recent lows around 8.75:

Gold

The XAU was top gun (-1.2%):

XAU

The BTK “B” wave bounce was rejected, set an alarm for a break under 1168.50:

Biotechs

The banking index was lower by 3%. Note that many of the regional banks were considerably weaker than the BKX on big volume.

Banks

The OSX is getting close to the lower boundary of the active pattern. A break in this sector will be confirmation that the broad market is in a price correction rather than a rolling time correction.

Oil Services

The SOX closed right at the 50dma and under the prior breakout level.

SOX

Consistent with most market breaks, selling was across the board and included all of the non-safety asset classes. Oil was sharply lower on the day.

Crude Oil

Gold was lower, not yet a safety asset class.

Gold

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Stock Special Weekend Report Topic Log

Sunday, December 26th, 2004

10/09/2010 – The Final Tradesight Special Weekend Stock Report and the Launch of Tradesight 4.0
10/02/2010 – End of Quarter Window-Dressing
09/25/2010 – Stops and Partials
09/18/2010 – The Current State of the Market
09/11/2010 – Rich’s Discussion of 9/11
09/04/2010 – No Report for Holiday Weekend
08/28/2010 – Ipads and More
08/21/2010 – How the Lightest Volume of the Week Translated into No Action
08/14/2010 – Checking Volume Measurements
08/07/2010 – A Value Area of the Last Week on the Markets
07/31/2010 – Updated Discussion of Usefulness of Futures and Data We Track
07/24/2010 – The Current State of the Market
07/17/2010 – Rich’s Discussion of the Flash Crash
07/10/2010 – Market Support Even on Gap and Go Days
07/03/2010 – No Report for Holiday Weekend
06/26/2010 – The Summer Volume Game Has Shifted
06/19/2010 – Intro to Futures
06/12/2010 – The Current State of the Market
06/05/2010 – Why Market Direction Matters (A Reminder)
05/29/2010 – No Report for Holiday Weekend
05/22/2010 – Money Supply (Part 2 of 2)
05/15/2010 – Unemployment Discussion (Part 1 of 2)
05/08/2010 – The VIX and the Strange Crash
05/01/2010 – GDP and Corporate Earnings: Post Earnings Season Analysis
04/25/2010 – Tradesight Tools New Sound Alerts
04/17/2010 – Recognizing Dullness
04/10/2010 – The Current State of the Market
04/03/2010 – No Report for Holiday Weekend
03/27/2010 – Post-Healthcare and the Market
03/20/2010 – Rich’s Trading with Clean Charts and a 10-period Exponential Moving Average
03/13/2010 – How We Count Winners and Losers in the Review Section of the Reports
03/06/2010 – Tradesight Comber in Action on a 1-Minute Chart for Trade Management
02/27/2010 – Comparing Three Trading Styles
02/20/2010 – Rich’s Dow 10k and The Bond Market
02/13/2010 – No Report for Holiday Weekend
02/06/2010 – Coming Back From Lunch – The Last Two Hours
01/30/2010 – The Current State of the Market
01/23/2010 – Technology Update (Trading Computers)
01/16/2010 – No Report for Holiday Weekend
01/09/2010 – How to Mentally Enter Your Trading Day and Make Adjustments
01/02/2010 – 2009 End of Year Report
12/26/2009 – No report for Holiday weekend
12/19/2009 – A Profitable Trading System
12/12/2009 – Outlook on Gold (The Bubble)
12/05/2009 – Rich’s Using the VIX and Advance/Decline Figures for Intraday Trading
11/28/2009 – No report for Holiday weekend
11/21/2009 – The Current State of the Market
11/14/2009 – End of Year Tax Run-ups
11/07/2009 – How to Handle Gaps on the Main Trade Calls
10/31/2009 – No report for Holiday weekend
10/24/2009 – Indicator Overdose
10/17/2009 – Trade Exit Rules
10/10/2009 – The Current State of the Market
10/03/2009 – Introducing the Tradesight Seeker and Comber
09/26/2009 – Rich’s Tradesight Comber Opening Discussion
09/19/2009 – Which Way Did They Buy Options Protection?
09/12/2009 – The Jobless Recovery
09/05/2009 – No Report for Holiday Weekend
08/29/2009 – The Current State of the Market
08/22/2009 – The MOB (A Terrific Indicator)
08/15/2009 – Rich’s Tradesight Seeker Opening Discussion
08/08/2009 – The Health Insurance Conversation and What It Means to the Market and the Economy
08/01/2009 – Some New Things at Tradesight
07/25/2009 – Market Guidance versus Stock Picking
07/18/2009 – The Current State of the Market
07/11/2009 – Review of Eight Days of Core Earnings
07/04/2009 – No Report for Holiday Weekend
06/27/2009 – Mid-Year All-Market Update
06/20/2009 – Outliers: Manager versus Stock Picker
06/13/2009 – Current Time of Day Beat of the Market
06/06/2009 – Rich’s Kondratieff Waves Report
05/30/2009 – New Page Layout for e-Signal
05/23/2009 – No Report for Holiday Weekend
05/16/2009 – Gap Fills
05/09/2009 – Workshop Session
05/02/2009 – The Current State of the Market
04/25/2009 – Futures Average Daily Range Tool
04/18/2009 – Rich’s Discussion of Gap Fill Thresholds
04/11/2009 – No Report for Holiday Weekend
04/04/2009 – Tradesight’s New E-Signal Tools
03/28/2009 – Technology Update
03/21/2009 – The Current State of the Market
03/14/2009 – Stock Settlement Versus Futures Settlement
03/07/2009 – Prioritizing Trade in This Market
02/28/2009 – The Three Parts of a Day
02/21/2009 – Current State of the Market
02/14/2009 – No Report for Holiday Weekend
02/07/2009 – Stimulus versus Spending: The Employment Factor
01/31/2009 – Rich’s Discussion of Rotational Rallies
01/24/2009 – What You Want an Up Market to Look Like
01/17/2009 – No Report for Holiday Weekend
01/10/2009 – 2009 Sector Update
01/03/2009 – 2008 Year in Review
12/27/2008 – No Report for Christmas Holiday
12/20/2008 – Rich’s 2008 Year in Review
12/13/2008 – The Current State of the Market
12/06/2008 – Ranking Chart Patterns
11/29/2008 – No Report for Thanksgiving Holiday
11/22/2008 – Tops and Bottoms
11/15/2008 – The Triple Bottom
11/08/2008 – Discussion of Two Trades: AAPL and BIIB
11/01/2008 – Election 2008 Report
10/25/2008 – The Early Entry
10/18/2008 – Market Bottoms
10/11/2008 – Rich’s Intermarket Analysis
10/04/2008 – The Current State of the Market
09/27/2008 – A Reminder of What We Do
09/20/2008 – The Federal Bailout
09/13/2008 – Margin Calls
09/06/2008 – Setting and Retaking a Trigger
08/30/2008 – No Report for Holiday Weekend
08/23/2008 – Preview of the Last Four Months of 2008
08/16/2008 – The Current State of the Markets
08/09/2008 – Rich Derrick’s “Tops Are Different Than Bottoms”
08/02/2008 – Firefox 3.0, Web 2.0
07/26/2008 – Chris’ Comments on Rich Derrick
07/19/2008 – Trading Technology
07/12/2008 – Afternoon Play and July Earnings
07/05/2008 – No Report for Holiday Weekend
06/28/2008 – What “Return to the Mean” Means
06/21/2008 – The Current State of the Markets
06/14/2008 – No Report for Holiday Weekend
06/07/2008 – More Market Directional Analysis
05/31/2008 – Update on Market Directional Tool
05/24/2008 – Trade Management: AMZN
05/17/2008 – Rich’s Calculating Measured Move Targets
05/10/2008 – A Perfect Chart Study: FFIV
05/03/2008 – Current State of the Markets
04/26/2008 – Tradesight Messenger 2.0 Release
04/19/2008 – Discussion on Earnings Releases
04/12/2008 – The Important of Volume
04/05/2008 – Q2 and Tax Season
03/29/2008 – Value Areas
03/22/2008 – No Report for Holiday Weekend
03/15/2008 – Update on the Market Directional Tool
03/08/2008 – Two Key Fibs in One Conversation
03/01/2008 – Rich’s Introduction to His New Market Reports
02/23/2008 – What Counts in the Trade Summaries
02/16/2008 – President’s Day Weekend (no report)
02/09/2008 – A Refresher on Market Direction
02/02/2008 – Tradesight 4.0 – New Changes to the Site and Reports
01/26/2008 – Current State of the Markets
01/19/2008 – Martin Luther King Weekend (no report)
01/12/2008 – Trade Execution
01/05/2008 – The First Three Days of a Year
12/29/2007 – 2007 End of Year Recap
12/22/2007 – Christmas Weekend (no report)
12/15/2007 – End of Year “Run-Up” Analysis
12/08/2007 – Current State of the Markets
12/01/2007 – Calling It From the Tape
11/24/2007 – Thanksgiving Weekend (no report)
11/17/2007 – Rich’s Pressure Signal Differential Indicator
11/10/2007 – Interest Rates, Oil, and the Fed’s Tough Spot
11/03/2007 – Current State of the Markets
10/27/2007 – The Factors in Buying Strength and Shorting Weakness
10/20/2007 – Volume and Holding Over During Earnings
10/13/2007 – Stops: The Basics
10/06/2007 – Construction
09/29/2007 – Fourth Quarter Discussion and Current State of the Markets
09/22/2007 – Triple Versus Single Expiration
09/15/2007 – Rich’s Discussion on The Repeal of the Uptick Rule
09/08/2007 – Mentality of New Traders
09/01/2007 – Labor Day (no report)
08/25/2007 – Current State of the Market: Into September and October
08/18/2007 – The VIX and the Market’s Future
08/11/2007 – The Global Credit Crunch
08/04/2007 – 3-Day Margin Calls
07/28/2007 – Current State of the Markets
07/21/2007 – NDX Floating Island
07/14/2007 – Tradesight Services Overview
07/07/2007 – Fourth of July Holiday
06/30/2007 – Rich’s Mid-Year Review: Things to Do More and Less Of
06/23/2007 – A Few Things You Might Not Know About Tradesight
06/16/2007 – Clean Charts to Skip
06/09/2007 – Volume Without Movement
06/02/2007 – Summer Doldrums
05/26/2007 – Memorial Day Weekend
05/19/2007 – Current State of the Markets
05/12/2007 – A Good Example of Automated Volume
05/05/2007 – NYSE vs. NASDAQ
04/28/2007 – Rich’s How to Stay in a Position
04/21/2007 – Risking Your PnL
04/14/2007 – Technology Update
04/07/2007 – Easter Weekend (No Topic)
03/31/2007 – The End of a Quarter
03/24/2007 – Factors in Determining What is Bold in the List
03/17/2007 – Current Look at the Market Heading into Tax Day (One Month Out)
03/10/2007 – Is Shorting More Risky (A Personal Story)
03/03/2007 – The Wake-Up Call
02/24/2007 – A Look Back at AAPL and the End of Year Tax Run-Up
02/17/2007 – President’s Day Holiday (No Topic)
02/10/2007 – Get Involved When the Trading is Good
02/03/2007 – Fed Funds and Tradesight Fed Funds Calculator
01/27/2007 – The Current State of the Market
01/20/2007 – The Windows Vista Factor
01/14/2007 – Different Types of “Range” Breakouts
01/06/2007 – Leveraged Instruments
12/30/2006 – End of Year Summary of All Markets
12/23/2006 – Discussion of Trading in the Last Week of the Year
12/16/2006 – Rich’s CPS Discussion (Continuation Pressure Signal)
12/09/2006 – What It Takes to Begin Trading
12/02/2006 – The Mental Bliss of Never Being Buried
11/25/2006 – Thanksgiving Holiday
11/18/2006 – The End of Year Tax Avoidance Run
11/11/2006 – A Trading Day
11/04/2006 – The Election and Ramifications
10/28/2006 – Rich Derrick’s Report on Daily Market Preparation
10/21/2006 – Triple Volume
10/14/2006 – Inflation and This Week’s FOMC Minutes
10/07/2006 – Size Parameters
09/30/2006 – Examining a Trade – YHOO
09/23/2006 – How a Win/Loss Ratio Factors into Your Returns
09/16/2006 – Current State of the Market and “Looking Back” on a Bottom
09/09/2006 – Volume is on the Other Side of the Trigger (example)
09/02/2006 – Rich Derrick’s Labor Day Top Ten Tips for Becoming a Successful Trader
08/26/2006 – The Fruit Stock (AAPL)
08/19/2006 – Sixteen Years
08/12/2006 – Current State of the Market and Overall Thoughts
08/05/2006 – Patience
07/29/2006 – August
07/22/2006 – Subscriber Q&A
07/15/2006 – When to Make Money in Which Direction
07/08/2006 – Rich’s QQQQ Position Challenge
07/01/2006 – Vacation
06/24/2006 – Tips on Trading A Light Volume Market
06/17/2006 – Rich’s Pattern Recognition – The 7/11 Candle
06/10/2006 – Priorities
06/03/2006 – High Beta Stocks
05/27/2006 – Rich’s VIX and What It Means To Your Personal Trading Plan conversation
05/20/2006 – Trading with Indicators
05/13/2006 – Current State of the Market: Bubbles and How Crashes Start
05/06/2006 – Viewing Gaps
04/29/2006 – Trading All Markets
04/22/2006 – How to Use Scalp Ideas
04/15/2006 – What Do You Think I Can Make?
04/08/2006 – Current Market Outlook
04/01/2006 – Rich’s Trading Reversals Discussion
03/25/2006 – The No-Danger Trades
03/18/2006 – Mapping Out a Quarter
03/11/2006 – Treating Longs and Shorts Equally
03/04/2006 – Targeting Money Goals Daily
02/25/2006 – The Back Side of the Wedge – Current Market View
02/18/2006 – Self-Contests
02/11/2006 – Viewing Risk/Reward in Terms of Odds of Success
02/04/2006 – Rich’s Beta and Volatility lesson
01/28/2006 – Current market setup
01/21/2006 – Lock in the Gain or Play the Rules?
01/14/2006 – Volume, Volume, Volume
01/07/2006 – Saving Money on Triggers by Watching the 5-minute Bars

All Reports Prior to January 1, 2006, can be found by clicking on the Stock link under Report Archive (Pre-2006) in the Navigation Menu on the left of your Tradesight screen and then going back to these dates:

12/31/2005 – Year In Review…2005
12/24/2005 – Rich’s Wave Analysis Intro, Part 2
12/17/2005 – The Learning Curve: Identifying Your Trading Style and Making It Work – Part 2
12/10/2005 – The Learning Curve: Identifying Your Trading Style and Making It Work – Part 1
12/03/2005 – The Current State of the Market
11/26/2005 – Rich’s Wave Analysis Intro, Part 1
11/19/2005 – Limit buyers/sellers versus active buyers/sellers versus hidden buyers/sellers
11/12/2005 – Why You Shouldn’t Use Hard Stops Unless You Have To
11/05/2005 – QQQQ Strangle concept
10/29/2005 – When to Take Early Entries
10/22/2005 – Rich’s ADX discussion
10/15/2005 – Why Volume is So Important in Trading
10/08/2005 – Taking a Little extra size to improve your trading
10/01/2005 – Optimizing Tradesight
09/24/2005 – Partial entries and Overcoming the “shorting” hurdle
09/17/2005 – The Current State of the Market
09/10/2005 – Trading for a Living
09/03/2005 – Rich’s Discussion on Setting and Testing Levels
08/27/2005 – What Makes the TSR Go to 5 or -5
08/20/2005 – Relying on the Chart
08/13/2005 – Risk versus Reward
08/06/2005 – Current State of the Market
07/30/2005 – Building Positions on Active Stocks
07/23/2005 – Preparing for the Trading Day
07/16/2005 – Rich’s Time Frames Discussion
07/09/2005 – Current Outlook on the Market
07/02/2005 – The Intent to Swing and Size Part 2
06/25/2005 – Swing Trading
06/18/2005 – Oil, Interest Rates, and the Market
06/11/2005 – Rich’s Reciprocal Range Play Examples
06/04/2005 – Subscriber Q&A
05/28/2005 – No report, working on lengthy subscriber Q&A
05/21/2005 – The Meaning of Options Expiration
05/14/2005 – The “Noise” Zone
05/07/2005 – Size and Percentages
04/30/2005 – Rich’s Four-Bar Termination Candles
04/23/2005 – Chart Pattern Discussion Part 2
04/16/2005 – Chart Pattern Discussion Part 1
04/09/2005 – Building a trade log
04/02/2005 – Current Market Overview
03/26/2005 – Panic Selling and the Big Picture
03/19/2005 – Rich’s Absolute Fibs
03/12/2005 – MB Trading order entry modules in E-Signal
03/05/2005 – Chris’ Screen Layout
02/26/2005 – Mark’s Value Area Description
02/19/2005 – Trade Management
02/12/2005 – Rich’s “Market Internals”
02/05/2005 – The Coming 24-Hour Marketplace
01/29/2005 – How much do specialists and market makers mess with your orders?
01/22/2005 – Trends, Confirmation, and Your Trading
01/15/2005 – Rich’s Nine-Bar Runs
01/08/2005 – What you should and shouldn’t do without market support

Prior to the Beginning of 2005, the weekend reports are in the Recap Archive after the Friday closing report

12/31/2004 – 2005 recap
12/24/2004 – No report for Holiday, preparing for end of year report
12/17/2004 – Charting and the pivot series
12/10/2004 – Rich’s VWAP discussion
12/03/2004 – The Tradesight Eyeball and a discussion of the three questions used at Tradesight to determine market direction for trading
11/24/2004 – Top Ten Things Unsuccessful Traders Say…Link to this Weekend Report Log for easy reference (posted Wednesday due to Holiday)
11/19/2004 – Current market environment and Fed comments about interest rates, inflation, and the trade deficit
11/12/2004 – Subscriber Q&A, about 25 questions
11/05/2004 – Rich’s description of different trade types, including time of day analysis for counter-trend trade calls
10/29/2004 – Advance comment on Election 2004 and its impact on the market
10/22/2004 – Report skipped in preparation for the lengthy Election report the following weekend
10/15/2004 – Why trading during the 8 days of core earnings is harder than any other time of the quarter
10/08/2004 – Rich’s report on market price gaps, gap fill thresholds, and market on close orders and their usefulness
10/01/2004 – Mozilla Firefox as an alternative to Internet Explorer
09/24/2004 – Combining trade management with the use of the Tradesight Messenger
09/17/2004 – Out of town, no report
09/10/2004 – Purpose of Tradesight: What it does and what it doesn’t do and how to learn the top-down approach to the markets
09/03/2004 – Short selling and covering part 2 – Naked shorting
08/27/2004 – Short selling and covering part 1 – What it is and how it affects chart action
08/20/2004 – August doldrums…why market volume matters for breakouts and breakdowns
08/13/2004 – Why do markets often rally into Presidential elections?
08/06/2004 – How rallies suck people into “buying dips”
07/30/2004 – Month-end window dressing
07/23/2004 – Current market outlook and commentary
07/16/2004 – All trades are not created equal…combining market action and chart patterns to adjust trade size and stop levels
07/09/2004 – No report…FOREX report launches
07/02/2004 – How to overcome the fear of increasing trade size
06/25/2004 – Analyzing market volume
06/18/2004 – A good example of how market volume affects trading intraday
06/11/2004 – Patterns that seem to work with a high degree of success don’t always translate into winning trading strategies
06/04/2004 – Why sloping trendlines don’t always help pick winning trades
05/28/2004 – Different types of trading that people do with the Tradesight reports
05/21/2004 – Tradesight introduction to FOREX
05/14/2004 – Why is volume getting lighter?
05/07/2004 – Oil prices and my Toyota Prius
04/30/2004 – Current market outlook and commentary
04/22/2004 – Why the market rally with the Fed announcement? (Report posted on a Thursday because of holiday)
04/16/2004 – How do you trade something like TASR?
04/07/2004 – How does Tax Day affect the market (Report posted on a Wednesday because of holiday)
04/02/2004 – Follow-up Q&A from subscribers…5 extra questions
03/26/2004 – Subscriber Q&A including retriggers, the three questions to determine market direction, and “clean” trading days
03/19/2004 – No report…prepping for the Q&A next weekend
03/12/2004 – Playing the short side after a period of long side play
03/05/2004 – Troubles with the unemployment number
02/27/2004 – Gap fills
02/20/2004 – A discussion on part of the mental aspect of becoming a trader
02/13/2004 – Brief discussion about options (Part 2)
02/06/2004 – Brief discussion about options (Part 1)
01/30/2004 – Share size versus account size…a conversation
01/23/2004 – Current look at some of the “bigger name” stocks in the market…the Generals
01/16/2004 – How long do you follow a pattern that never triggers?
01/09/2004 – Size needed to make a living trading
12/31/2003 – End of year report combining two weekend reports into one
12/19/2003 – End of year economic discussion…deficits
12/12/2003 – Year end tax-selling
12/05/2003 – Current market outlook and commentary
11/28/2003 – Why I created Tradesight
11/21/2003 – Chart discussion for breakout plays
11/14/2003 – Analysis of recent economic numbers
11/07/2003 – Swing trading breakouts
10/31/2003 – Top-notch chart patterns

Before this point, the weekend reports were attached to the beginning of the Monday Today’s Picks

10/27/2003 – How to analyze your results
10/20/2003 – How “late” you can take an entry
10/13/2003 – How “early” you can take an entry (cheating)
10/06/2003 – Why we started offering “first targets” instead of just “swing targets” in a changing market
09/29/2003 – Why you want to pay taxes as a trader
09/22/2003 – Is this another market bubble?
09/15/2003 – Charting (Part 2)
09/08/2003 – Charting (Part 1)
09/01/2003 – What is the Tradesight Swing Rating (TSR)?
08/25/2003 – Real estate
08/18/2003 – No report (out of town for seminar)
08/11/2003 – Average volume requirements for trading
08/04/2003 – Current market outlook and commentary
07/28/2003 – Trade size on small caps
07/21/2003 – Pure discussion about the three questions for determining market direction
07/14/2003 – Current market outlook and commentary for Q2 2003 earnings
07/07/2003 – 2003 Mid Year Update and Analysis
06/30/2003 – Economic data analysis
06/23/2003 – Subscriber Q&A session
06/16/2003 – Top FIve Things Successful Traders Never Think
06/09/2003 – Learning to trade yourself
06/02/2003 – VIX (Old VIX)
05/26/2003 – The psychology of selling winners early and holding losers too long
05/19/2003 – Current market outlook and commentary
05/12/2003 – The “retail rush” at the open
05/05/2003 – A few trading notes, including the importance of partial profits
04/28/2003 – A critical “area” of the market
04/21/2003 – Options trading for “less risk” than stocks
04/14/2003 – New traders and trade size
04/07/2003 – Comments about general use of the site for new subscribers
03/31/2003 – Current market outlook and commentary
03/24/2003 – Monday Morning Quarterbacking in the market
03/17/2003 – No report (out of town for a seminar)
03/10/2003 – Being a market maker
03/03/2003 – Purpose of Tradesight
02/24/2003 – Taking losses to make you a better trader
02/18/2003 – Macroeconomic influences on the market (on a Tuesday because of the Holiday)
02/10/2003 – The pre-war market…volume troubles
02/03/2003 – My trading system, circa early 2003
01/27/2003 – Answers to questions about the “trading learning curve” and “option size allocations”
01/21/2003 – Top-down approach to trading the market (on a Tuesday because of the Holiday)
01/13/2003 – Trading the small cap stocks
01/06/2003 – Discussion of the “fiscal stimulus package” proposed to Congress

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