The Daily Market Forecast... Simplify!
Thursday’s Results: The suggested short @ 4504.50 ran 38.75 points to the next level where buying 4465.75 stopped.
Quick Tip: Simplify
When you meet someone new socially the conversation usually leads to “What do you do?” Answering “I trade the market” usually brings the response “You think it’s going up or down?”
This is an important decision you always make before you trade. Is the asset you’re trading likely to go up or down and for how long? Before you can answer you need to identify the timeframe you’re trading. You can be Bullish long term but Bearish for today and vice versa. You may want to keep a grid with short, intermediate, and long-term timeframes for your Bullish and Bearish outlooks.
Opinion on direction and duration is worthless without evidence, analysis method, or data. You need a formula to ultimately answer the question. There are many. Here’s one that is simple and historically sound. It’s used by many great traders and presented in many excellent books on trading. Try it on for size:
- Closing price is UP, volume is HIGHER, demand is building = Bullish
- Closing price is UP, volume is LOWER, demand is waning = Bearish
- Closing price is DOWN, volume is HIGHER, supply is increasing = Bearish
- Closing price is DOWN, volume is LOWER, supply is reducing = Bullish
Today’s Best S&P Turning Points
Sell 4445.00 stop 4450.75
Buy 4325.75 stop 4320.00
Trade Fearlessly,
Mike Siewruk