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...

Results of Monday’s Best S&P Turning Points: Neither suggestion triggered. 

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

Buy 4001.75 stop 3998.00. Short 4052.50 stop 4056.75. 

The World Sentiment Index: (+100/-100) DIPS from -43 to -50 with all major world markets bearish. Historically price closed lower 58% of the time. 

Catalysts: Employment Cost Index @ 8:30. Home Price Index @ 9:00. Chicago PMI @ 9:45. Consumer Confidence @ 10:00. Risk off while waiting for FOMC tomorrow. 

Quick Tip: Wide Range Exit

Imagine you’re in a trade with multiple contracts (shares) and your planned profit targets have been met. Price is continuing in your direction, and you have an open position albeit smaller. You’re looking for a good exit not wanting to give up too much profit. 

How about giving up no profit? Can you pick the end of the move? Sometimes, but...

Results of Friday’s Best S&P Turning Points: Neither suggestion triggered. 

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

Buy 4001.75 stop 3998.00. Short 4082.50 stop 4088.25. 

The World Sentiment Index: (+100/-100) DUMPS from +17 to -43 with most of the major world markets bearish on rising volatility. Historically price closed up only 44% of the time. 

Catalysts: Nothing important on the economic calendar. Mood is risk-off. 

Quick Tip: Expectations

Having taught over 4000 traders in the past 15 years the goal I’ve heard most often is the desire for consistent profitability. 

You know what profitability is but how do you define consistency in trading? Time enters the definition. If you want to duplicate the consistency of an hourly wage or weekly paycheck, good luck! 

In Dr. Brett Steenbarger’s excellent book, Enhancing Trader...

Results of Thursday’s Best S&P Turning Points: No trades were suggested prior to the GDP announcement. Afterward, we looked to short 4074.50 but that didn’t trigger until seconds before the close. If you’re comfortable holding after the cash market closes during earnings season you were rewarded with a 17-point plunge. 

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

Buy 4029.75 stop 4024.25. A solid short is far away at 4147.00 stop 4152.75. 

The World Sentiment Index: (+100/-100) EASES from +20 to +17 in a mixed, low volatility world. 

Catalysts: Personal Income @ 8:30. Consumer Sentiment & Pending Home Sales @ 10:00. Intel tanks taking chip stocks with it. 

Quick Tip: Winning Trader’s Checklist

Trading is more about your outlook and behavior than you may think. Be honest and rate yourself on the following: 

Patience: Are you...

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 

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