Trade Aptitude

Results of Tuesday’s Best S&P Turning Points: The buy @ 3988.00 filled in the pre-market and stopped out. The short @ 4030.50 ran for 14 points. 

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

Due to the important economic news this morning and the likelihood of price whipsawing, we’re waiting for the cash market to open to assess turning points today. 

The World Sentiment Index: (+100/-100) FLIPS from -20 to +20 with China on holiday, remaining major world markets are modestly Bullish on lower volatility. Historically it’s a coin toss on the market closing up or down but the average move up is 33% greater than the average move down. 

Catalysts: Durable Goods, GDP, Jobless Claims & International Trade @ 8:30. New Home Sales @ 10:00. Key earnings are coming in better than expected fueling a modest risk-on mood. 

Quick Tip: Taking Profit 

Looking at the short entry yesterday you’ll notice the trend was up approaching the entry price. Not smoothly though. Price can move in impulses and corrections. The impulse is in the direction of the trend at the time, the correction the opposite. 

The impulses up were 9.75, 13.75, and 8.25 points. We’re more interested in the corrections. Why? Because we want logical profit targets. Our analysis suggests this is the turning point and the trend will end. Of course, that doesn’t happen all the time. 

The corrections down were 7.00 and 6.75 points. This makes an initial profit target of 6 points sensible. After that you can trail stop based on a price pivot. In this case you would capture 12.50 points on a two-contract trade from a 14-point run. Not bad!

In our trading room we manage multiple strategies with edge and focus on the “Art of the Exit” as a team. Learn more here. 

Trade Fearlessly,

Mike Siewruk 

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