Trade Aptitude

Friday’s results: Buying 5461.50 only bounced for 6.50 points. Shorting 5521.00 stopped out for a full loss. 

Today’s Best S&P Futures Turning Points: Buy 5382.75 stop 5379.25. Short 5581.25 stop 5584.75.

The World Index: (+100/-100) jumps from -43 -7 with Asia Bearish and the Western world Bullish. 

Catalysts: Nothing obvious. 

Quick Tip: Tick Trick

A popular indicator for day trading stocks and index futures is the NYSE Tick. It’s a sentiment indicator that measures the number of stocks moving up versus down. For example, with about 2300 stocks on the NYSE if 1500 made an uptick on the last trade and 800 made a downtick the tick index would be +700 (1500 – 800). 

You can use it as supporting evidence to take long/short positions and as confluence for trend. Readings above zero support buys and readings below zero support sells. Keep in mind that it’s only effective for very short periods of time. 

The main problem with the tick chart is interpretation. Using a one-minute time interval (preferred for day-trading) it’s frequently difficult to get a clear directional signal. Fortunately, you can apply a simple 20 period moving average to the chart to smooth the spikiness and visualize the sentiment better. If your platform allows (TradeStation does) you can blank out the tick itself and simply watch the smooth average. 

For Rangebound Markets: Consider long positions when the tick index falls below -1,000 and exit when the indicator gives a reading of +1,000. Combine these readings with supply and demand levels to perfect your signals. 

For Trending Markets: If the tick is stably above or below zero, retracements to the zero line can be good confluence for your strategy’s entry signals. 

Our trading teams focus on day trading futures and swing trading options. Maybe you'll fit right in. You can try either or both risk-free. 

Trade Fearlessly,

Mike Siewruk

P.S.  Feel free to pass this along to your trading buddies. Share in the wealth!