Trade Aptitude

Results of Tuesday’s Best S&P Futures Turning Points: Buying 5013.50 was filtered out during the CPI release. The Short didn’t trigger. 

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

Buy 4972.75 stop 4969.25. Short 5040.50 stop 5045.25.  

The World Index: (+100/-100) reverses from -25 to +36 with most major world markets Bullish on low volatility. 

Catalysts: Fed’s Goolsbee speaks @ 9:30. Crude Oil Inventories @ 10:30

Quick Tip: Swiss Army Knife 2

If you didn’t read yesterday’s blog it would be helpful to do it now. Here’s a link. 

We like Bollinger Bands as a technical indicator because they display most of the information we need to understand market state: trend and volatility. 

In reading his book, Bollinger on Bollinger Bands, I found a pearl of trading wisdom that stuck with me, and I use all the time. In my own words, “low volatility begets high volatility and vice versa.” 

Critics of technical indicators will complain about them being a lagging indicator. That they have no predictive value. Here’s a counter interpretation…

Consider price volatility. Will it stay low, narrow range, and flat… forever? Will it stay high, wide ranging and spiky… forever? Or will it cycle between these states? 

Here’s what you know when you see tightly squeezed Bollinger Bands, prices will eventually explode one way or the other. We don’t know when, but we know an increase in volatility is coming and this gives us ample time to plan how we’ll trade that result. Think “entry opportunities.” 

The reverse is true. Wide Bollinger Bands will eventually calm down. The directional move will slow, cease, or reverse. Think “exit opportunities.” 

Our team trades a reversal strategy based on these observations. It ranks #1 for consistency. 

Tired of trading alone? Our team day-trades multiple strategies with edge in a live online environment. Join us, learn the strategies, and trade live with us daily for 30 days. Money back if you’re not blown away!

Trade Fearlessly,

Mike Siewruk

P.S. Forward this blog to your trading buddies. Share in the wealth!