The Daily Market Forecast
Thursday’s Best S&P Turning Points Results: The buy @ 3501.25 missed filling by only 1 point. The short @ 3713.50 filled in the Globex last night and ran for 53.25 points.
Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets):
Short 3778.00 stop 3783.00. Buy 3654.00 stop 3649.25.
Quick Tip: History Teaches…
Technical indicators can be helpful. The chief complaint is that most are lagging what’s happening in present time. “What good is history when we’re trying to determine what will happen next?”
It turns out history is an excellent teacher. Historical evidence doesn’t always work, but there are probabilities gleaned from its analysis. Trading is all about probabilities, not certainties. From this perspective they are valuable.
Used skillfully, knowing their benefits and limitations, technical indicators can help build your case for taking a trade or not.
Here’s an example: Think about trend. You’ve no doubt heard the advice “Trade in the direction of the bigger trend.” There are many strategies that have this rule. If you’re concerned about trading with the trend then you need a definition of what that looks like and now you’re using historical information. You could use a moving average or a chart trendline, both are historical. No need for two indicators for the same job. Pick your preferred definition of trend.
You can benefit by combining different types of indicators. Trend, volatility, momentum, volume, sentiment, open interest, and intermarket data are indicators you can combine safely to avoid “collinearity.”
One of our favorites is volume-at-price. The levels suggested in this blog are determined this way. It’s great historical evidence that delivers sound probabilities for reversal and breakout trades. The chart above shows this.
The World Sentiment Index: (+100/-100) SOARS from -8 to +93 with all major world markets very Bullish. Historically higher closes from the open occurred 63% of the time.
Catalysts: Retail Sales & Import/Export Prices @ 8:30. Consumer Sentiment & Business Inventories @ 10:00. Banks are beating earnings estimates so far. Rate hikes remain hawkish. UK mess eases.
Trade Fearlessly,
Mike Siewruk
P.S. Multiple strategies, software tools, teammates, and coaching. Learn why you should join our team here. For a personal consultation to assess fit (without selling) email me for an appointment: mike@thedailymarketforecast.