Results of Monday’s Best S&P Turning Points: The suggested short @ 4157.00 triggered during the Globex this morning @ 5:45 ET. This trade is filtered out due to the CPI announcement @ 8:30 (the volatility is predictable, but the direction is definitely not).

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

Holding off on selecting the turning points until the CPI is released and the volatility is assessed. 

The World Sentiment Index: (+100/-100) RISES from +21 to +29 in a world of mixed sentiment and low volatility. Historically price closed down from the open 56% of the time with drops averaging 50% more than rises.   

Catalysts: CPI @ 8:30. FOMC members speaking @ 11:00, 11:30 & 14:05. 

Quick Tip: Lethal Bias 

Have you ever looked at your trade result and said to yourself “If had a bigger stop it would have been a winner” or “If I...

Results of Friday’s Best S&P Turning Points: Neither trade suggestion triggered during a narrow range day. They remain active. 

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

Buy 4029.75 stop 4024.25. Short 4157.00 stop 4161.75. 

The World Sentiment Index: (+100/-100) JUMPS from -57 to +21 in a world of mixed sentiment and low volatility. Historically it’s a coin toss which way price closes.  

Catalysts: Nothing on the economic calendar, waiting on CPI tomorrow. 

Quick Tip: Adapting

Markets change character. They trend until they don’t. Volatility cycles. This means you must adapt your rules to these changes. 

But how? By re-framing your thinking about trade outcomes. Instead of allowing losers to give you negative feelings and winners to give you positive feelings, re-frame both outcomes into learning events. 

...

Results of Thursday’s Best S&P Turning Points: The buy @ 4131.50 offered 10.50 points.

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

Buy 4029.75 stop 4024.25. Short 4157.00 stop 4161.75. 

The World Sentiment Index: (+100/-100) PLUMMETS from +71 to -57 with all major world markets except Tokyo very Bearish on higher volatility. Historically price has closed down from the open 73% of the time. 

Catalysts: Consumer Sentiment & Inflation Expectations @ 10:00. Oil soars on Russian production threat. 

Quick Tip: Sequencing 

If trading is 80% psychological that leaves 20% to the edge your strategy has. We really don’t know if the 80% figure is accurate but you’ll hear a big number like that from many skilled traders and coaches. Regardless the accuracy, how we behave as traders is vitally important. 

Back when racquetball was popular I...

Results of Wednesday’s Best S&P Turning Points: Neither suggested trade triggered. 

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

Buy 4131.50 stop 4126.50. Short 4206.50 stop 4212.25. 

The World Sentiment Index: (+100/-100) SOARS from zero to +71 with all major world markets except Tokyo very bullish on higher volatility. Historically it’s a coin toss which way price closes but the up closes are much greater than the down closes are lower. 

Catalysts: Jobless Claims @ 8:30. Nothing else obvious.  

Quick Tip: This is Real

ChatGPT is certainly amazing technology. I don’t use it to write this blog, which it can do, but I do use it for research, much like you would use a search engine. 

For example, today I wanted to find a fresh quotation or two about trading psychology by well-known authors Brett Steenbarger, Mark Douglas, and...

Results of Tuesday’s Best S&P Turning Points: The short @ 4146.00 was cancelled due to the volatility from Powell’s comments @ 12:40 ET. As mentioned in Monday’s blog, “…pass on reversals in strong trending days…”.

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

Buy 4114.25 stop 4009.75. Short 4146.00 stop 4206.50 stop 4212.25. 

The World Sentiment Index: (+100/-100) DIPS from +21 to zero in a world of mixed sentiment and low volatility. Historically it’s a coin toss which way price closes.  

Catalysts: International Trade @ 8:30. EIA Petroleum Status Report @ 10:30. FOMC members speaking @ 9:15, 9:30, 10:00, 12:30 & 13:45. Takeaway from Powell yesterday: “Inflation will take ‘significant time’ to come down.”   

Quick Tip: Power in Confluence

You have a trade plan with specific rules of entry...

Results of Monday’s Best S&P Turning Points: Neither suggested trade triggered on a narrow range day. They remain on the chart for today. 

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

Buy 4081.00 stop 4076.00. Short 4146.00 stop 4151.75. 

The World Sentiment Index: (+100/-100) JUMPS from -57 to +21 in a world of mixed sentiment and low volatility. Historically it’s a coin toss which way price closes.  

Catalysts: International Trade @ 8:30. Powell speaks @ 12:00. Higher interest rate peak possible.  

Quick Tip: Outcome Bias  

Caring about whether your current trade is a winner or loser is counterproductive. It encourages emotional reaction. You should be trading a strategy that has proven edge and that gives you the probability of the outcome over many trades. No reason to be concerned about any one or even any series of trades...

Results of Friday’s Best S&P Turning Points: The suggested buy @ 4134.50 didn’t trigger until the Globex opened on Sunday night running a modest 8.50-points. The breakout short from the level was the better trade, currently open with 21-points MFE.

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

Buy 4081.00 stop 4076.00. Short 4146.00 stop 4151.75. 

The World Sentiment Index: (+100/-100) DUMPS from -29 to -57 with most major world markets firmly Bearish. Historically the price has closed lower 73% of the time.  

Catalysts: Nothing on the economic calendar. Friday’s employment report spooked the Bulls. Geo tension with China.  

Quick Tip: Breakouts  

The suggested Turning Points in this blog are derived from extreme volume at price. Think of those price ranges as “fair value.” Plenty of buyers and sellers...

Results of Thusday’s Best S&P Turning Points: Shorting 4193.50 ran for 12.25 points. 

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

Buy 4134.50 stop 4128.75.. Short 4206.50 stop 4212.25. 

The World Sentiment Index: (+100/-100) DUMPS from +21 to -29 with most major world markets leaning Bearish. Historically the price has closed higher 55% of the time.  

Catalysts: Employment Situation @ 8:30. PMI Composite Final @ 9:45. ISM Services Index @ 10:00. Big Tech losing luster. 

Quick Tip: Entry or Exit?   

The money is made in the exit, not the entry. That’s not to say you can randomly enter a market but the resulting gain or loss depends on your exit. 

The short trade yesterday found a significant level of resistance, reversing four times before the sellers were gone. Depending on your exit rules this great entry could have been a...

Results of Wednesday’s Best S&P Turning Points: Shorting 4147.00 stopped out in a bullish reaction to FOMC commentary. 

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

Buy 4081.00 stop 4076.00. Short 4193.50 stop 4198.75. 

The World Sentiment Index: (+100/-100) EASES from +29 to +21 with Asia soft and the west mildly bullish. Historically it’s a coin toss on direction. 

Catalysts: Jobless Claims and Productivity & Costs @ 8:30. Factory Orders @ 10:00. 

Quick Tip: Higher Time Intervals 

One common rule in trading is to trade in the same direction as a higher time interval. If you’re a day trader using 5-minute candles your higher time interval would be 20 or 30 minutes (a multiple of 4 or 5). 

In our trend trading strategy this rule works fine with the S&P. The documented results of over 1000 trades in various market conditions...

Results of Tuesday’s Best S&P Turning Points: Shorting 4052.50 stopped out.  

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

Buy 4001.75 stop 3998.00. Short 4147.00 stop 4152.75. 

The World Sentiment Index: (+100/-100) JUMPS from -50 to +29 with in a world of modestly Bullish sentiment. Historically price closed lower 56% of the time. 

Catalysts: ADP Employment Report @ 8:15. ISM MFG Index, JOLTS & Construction Spending @ 10:00. EIA Petroleum Status Report @ 10:30. FOMC Announcement @ 14:00. FOMC Press Conference @ 14:30. Note that market reactions are greater during the press conference.  

Quick Tip: Trading Today? 

The beauty of trading is there are many styles and strategies to choose from. Once you realize this you’ll feel empowered, excited, and eager to trade. Bad idea. 

Your go-to book on learning trading should be...