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 verifies the rule. 

Not so with oil. This was a surprising find that tells you not all assets trade the sam...

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 Enhancing Trader Performance by Brett Steenbarger. Among the dozens of proven tips and lessons he shares, this o...

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 enough of the time to warrant consideration.

Here’s how: Price moves in impulses and correc...

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 Performance, he mentions a conversation he had with all-star trader Linda Raschke. She openly admitted t...

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 comfortable waiting for the right opportunity? 

Emotions: Do you let fear, greed, impulsivity, and ego clo...

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. N...

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

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

Buy 3988.00 stop 3984.00. Short 4030.50 stop 4035.25. 

The World Sentiment Index: (+100/-100) REMAINS at -20 with China on holiday, remaining major world markets are modestly Bearish on lower volatility. Historically the close was higher than the open 61% of the time. 

Catalysts: Crude Oil Inventories @ 10:30. Geo-political tensions rise over tanks to Ukraine. MSFT warns. 

Quick Tip: Finding your style. 

There are many winning trading strategies. Read any of Jack Schwager’s “Market Wizards” books and you’ll be convinced of this. To succeed you need to trade the style that resonates with your personality. Otherwise, your confidence and performance will wane.

Here’s an example comparing two very popular styles of trading: Trend Following versus Mean Reversion. Regardless of the tools/indicators you use to e...

Results of Friday’s Best S&P Turning Points: Shorting 3945.00 stopped out. 

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

Buy 3951.50 stop 3946.50. Short 4022.50 stop 4027.75. 

The World Sentiment Index: (+100/-100) EASES from +50 to +30 with China on holiday, remaining major world markets are modestly Bullish on lower volatility. Historically the close was higher than the open 44% of the time. 

Catalysts: Nothing on the economic calendar.  

Quick Tip: Windfalls

It’s almost always a smart decision to take windfall profits. You have a good idea what your house is worth. If a developer came by and offered you far more than market value you’d likely accept and move on.

Do you know what a windfall profit is in your trading? Rather than arbitrarily defining the amount, study your track record. What is your average winner? What are your largest few winners? How often do the big wins happen? As simple as it sounds knowing your windfall nu...

Results of Thursday’s Best S&P Turning Points: Neither suggested trade was triggered in a relatively narrow range day. They remain on the chart.  

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) SOARS from -64 to +50 with all major world markets mildly Bullish on lower volatility. Historically the close was higher than the open 42% of the time. 

Catalysts: Existing Home Sales @ 10:00. Not much else. 

Quick Tip: Ask Yourself “Why?”

Why are you trading? For profit! There is no other logical reason to speculate. 

Dig deeper. What kind of profit do you want? Small, consistent “paychecks” or big wins? There is an important difference between the two decisions.

If you’re looking for frequent small gains you’re likely a day trader and should be taking profits quickly. The reason is market “noise.” Watching price move on an intraday time interval y...