Trade Aptitude

Results of Wednesday’s Best S&P Turning Points: The suggested short @ 4028.00 ran for 12.25 points before kissing the stop, then became the high of a huge down day. 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Buy 3892.50 stop 3887.50. Short 3945.00 stop 3950.00.  

The World Sentiment Index: (+100/-100) PLUMMETS from +36 to -64 with most major world markets Bearish on higher volatility. Historically the close was higher than the open 54% of the time. 

Catalysts: Housing Starts, Jobless Claims & Philly Fed MFG @ 8:30. EIA Petroleum Inventories @ 11:00. Fed’s Brainard speaks @ 13:15. Fed governors giving mixed interest rate signals. 

Quick Tip: Re-Entries at the Top

Yesterday’s short entry at the 4028.00 high volume level was packed with sellers. It took 5 strong buying attempts to get above it before sellers took control and sent the market down hard to the close. I’d like to think it was caused by our trading team but know better. 

The chart provides us a question: Can we use these volume levels with re-entries? The short answer is “yes” but the best answer requires more information. 

Are you a scalper, looking for a few points? Then this level was your nirvana. It took the 5th touch to penetrate more than 1 point and delivered 4 multi-point winners in less than 30 minutes. 

Are you looking for better risk/reward, say risking 4 points to get 12 points? It worked once. The evidence we’ve collected, over 10,000 setups, tells us re-entries work fine but less often than the initial entry. With an abundance of setups every day trading Multi-Strat most of our team trade only the best opportunities. No re-entries. 

Are you trading for end of day or swing exits? This level was the high of the day and delivered 82 points at the close. This style of trader would likely have been adding to the position as the down trend accelerated. Start small, allow for enough noise with a generous stop, and keep adding as the momentum increased. 

If a picture is worth a thousand words then a live real-money demo of our trading strategies should be better. Join me today, January 19 @ 12:30 PM ET for a couple hours of action trading the S&P futures. Lessons included. Click here to register. 

Trade Fearlessly,

Mike Siewruk 

P.S. Feel free to share this blog with all your trading buddies.