The most important technical area right now is the 50-day MA. This moving average has caused a lot of grief for bulls since 2007. We are still in a huge neutral range. I suspect that it will take the market a while to make up it’s mind, but when it does, jumping on the intermediate-term will be extremely profitable. Until then, stick with short-term swing trading and the more favored day trading strategies.
On the 40-day chart, you can see that I marked off 860-880. This is an area where the market either continued or reversed it’s direction. This area also marks the 50-day MA, which is currently at 867 on the SPX. We broke out of a short-term symmetrical triangle, but with all the crap going on, don’t be surprised if we get a -20/-30 pt pullback. There are too many news items that will be coming out that will precipitate an instant rally or sell-off. This could be another “buy the rumor, sell the news” type of thing. Don’t get too excited about anything.
I am currently reading “Trade with Passion and Purpose by Mark Whistler (Wiley, 2007)”. It’s a $49.95 book, but worth every penny. It deals with all aspects of the psychological/emotional element in trading, an area that is very much neglected. I always tell traders to be patient and stop being impulsive. Much of trading is about waiting – waiting for the set-up, waiting for the breakout, waiting for the pivot point, waiting and more waiting!
Be cool, hunny bunny.
[youtube:http://www.youtube.com/watch?v=fMRi-gFeK-M 450 300]I did remarkably well so far in 2009, producing gains above +60% YTD. My intention is to now cut my position sizing by half and trade less frequently in order to make sure these gains (+ future gains) stay with me until the end of 2009 for my 4th annual triple-digit gain. In fact, I’m going to take a break for a week because I fucking deserve one. I would go on vacation, except I have to babysit some students. The majority of my gains come from my proprietary Spiker™ strategy and maybe, one day, I’ll write a book on it.
Currently in 90% cash and not giving a damn about what happens this week. Watch that 50-day MA.
Update: I forgot to mention that the Total Unemployment (U-6), unadjusted, is at 15.4%! The chart below is the only chart where I don’t expect a pullback any time soon – click to enlarge.
Great stuff CA. my current opinion is that the breakout of the triangle is really an overthrow, especially the naz.
Congrats on your YTD, and you are correct to play it small.
A gap down will immediately break through the 50-day. The market is only 1 pt above it.
In regaurds[sic] to the short positions I put on Friday at EOD, it’s near win / win.
I agree with both of you guys. Short and sweet, and watch those swingers. CA, write a book!
ZM
Nice going, ytd. Your students are lucky. I remember when you had at least one spot left in your limited “class” and I thought about it, but didn’t think I had the time or enough experience trading to pick up everything you were teaching.
Glad you’re posting stuff here.