The Daily Market Forecast
Tuesday’s Best S&P Turning Points Results: The suggested buy level was cancelled due to the CPI release.
Quick Tip: No Gambling
After trading for 23 years and teaching trading for 14 years you know the top 3 questions you’ll hear when you say you’re a trader:
Q. Where’s the market going?
A. I don’t know.
Q. Any good stock tips?
A. No.
Q. Isn’t trading gambling?
A. No.
At this point they’re curious and confused. If I don’t know where the market is headed, and I don’t have a good stock tip, and what looks like a crapshoot isn’t, then what is it that a trader does do?
Traders find opportunities in the market where the probability of success is in their favor. It’s not gambling. It’s more like being the casino, which is a highly profitable business.
But the main difference between being a trader and owning a casino is huge… casinos don’t have to worry about emotions. They’re run by accountant types. Number crunchers. Management is removed from the thrill of winning and despair of losing.
This fact makes trading hard to succeed at. Therefore, you must do everything you can to be unemotional about your results.
One excellent way to take big risk out of your trading is to not trade at certain times. You’ll miss some winners but also some losers. Sometimes big ones. And that’s what you have to avoid the most, big losers.
Yesterday’s CPI release was anticipated to be good news. The market was gapping up steadily for a few days and advancing during the Globex session right up to the 8:30 ET release. The news was bad. Price plunged. Big down day.
The suggested buy level yesterday was at 4128.25, price was above at 4160.25 at 8:30 ET when the CPI was released. Good news would have the market soaring and the level never touched. Bad news would have the market plunging and your trade would be high risk.
That is why the trade was cancelled. Use common sense. Don’t be rote. Include rules in your plan that prevent you from the highest risk circumstances.
The World Sentiment Index: (+100/-100) PLUMMETS from +36 to -64 with all world markets bearish (S&P futures are trying to open higher). Historically it’s a coin toss where the day will end up, but the down days are twice as big as the winning days.
Catalysts: PPI @ 8:30. EIA Petroleum Status Report @ 10:30.
Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets):
Buy 3876.75 stop 3871.75.
Short 4000.00 stop 4005.75.
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.