Results of Thursday’s Best S&P Turning Points: The buy @ 3929.00 stopped out. 

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

Buy 3876.75 stop 3871.75. Short 3924.50 stop 3930.25

Globex View: Bouncing from a strong drop. 

The World Sentiment Index: (+100/-100) eases from -64 to -50 with the Western world very bearish, Asia neutral. Historically, price will close lower than the open 56% of the time.  

Catalysts: PMI Flash @ 9:45. Global recession risk rises. Triple Witching volatility.

Quick Tip: Third Friday

How does your strategy perform on the third Friday of every month? Options expiration day tends to increase volatility, especially later in the day. 

Today is a special expiration day, Triple Witching, where stock index futures, equity index options, and stock options all expire. This occurs quarterly and since this is the final quarter of the year there...

Results of Wednesday’s Best S&P Turning Points: No trades. 

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

Buy 3929.00 stop 3923.25. Short 4074.50 stop 4079.50

Globex View: Trending down.

The World Sentiment Index: (+100/-100) PLUMMETS from zero to -64 with most major world markets Bearish on rising volatility. Historically, price will close higher then the open 54% of the time.  

Catalysts: Jobless Claims, Philly Fed MFG, Empire MFG & Retail Sales @ 8:30. Industrial Production @ 9:15. Business Inventories @ 10:00. 

Quick Tip: Hardest Lesson

If you’re a discretionary trader intuitively making entry and exit decisions AND you’re successful, congratulations! You are a rare breed. It’s not that discretionary trading doesn’t work, it’s that to succeed takes years to hone the skills. 

This leaves rule-based trading the best...

Results of Tuesday’s Best S&P Turning Points: Price reacted wildly to the CPI release cancelling the short level @ 4123.50, the long level never triggered. 

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

Holding off on reversal trades today with continued volatility expected from the FOMC Announcement & Press Conference. 

Globex View: Ranging. 

The World Sentiment Index: (+100/-100) DROPS from +36 to zero in a world of mixed sentiment and low volatility. No historical edge. 

Catalysts: Import/Export Prices @ 8:30. EIA Petroleum Status Report @ 10:30. FOMC Announcement @ 14:00. Press Conference @ 14:30. 

Quick Tip: FOMC Trading

The pattern tends to be range-bound before the announcement and spiky afterward. This should help your trade selection and planning. In fact, if you have solid historical data on your strategy’s performance on FOMC day you might not...

Results of Monday's Best S&P Turning Points: The short @ 4002.25 stopped out. 

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

Short 4123.50 stop 4128.25. Buy 3981.00 stop 3976.50. 

Globex View: Trending up. 

The World Sentiment Index: (+100/-100) JUMPS from -36 to +36 with most major world markets mildly Bullish. Historically price will close above the open 55% of the time. 

Catalysts: CPI @ 8:30. SBF is in jail (duh!). 

Quick Tip: Futures Bookie? 

Sports betting is generally risk-free for the Bookie. They adjust the odds as the bets roll in to stay “delta neutral” (to steal a trading definition). 

The CME has an interesting product called an Event Contract. They look just like sports bets. For example, this morning you could bet that the S&P Futures will close above 4025. It’s at 4045 at 7:20 ET. You’ll pay $11.75 to...

Results of Friday's Best S&P Turning Points: The buy @ 3937.00 filled minutes before the session ended and only bounced for 5.25 points. 

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

Short 4002.25 stop 4006.50. Buy 3922.50 stop 3917.75. 

Globex View: Trending up. 

The World Sentiment Index: (+100/-100) PLUMMETS from +50 to -36 with most major world markets bearish. Historically price will close above the open 56% of the time. 

Catalysts: Nothing on the economic calendar. Waiting on CPI & FOMC tomorrow and Wednesday.  

Quick Tip: Everyone is a Day Trader

If you’re a position trader, buying and holding for months, maybe years, you’ll likely disagree with that statement. Even swing traders will disagree. But think of it this way, regardless of your holding period, you are buying and selling your position during the day...

Results of Thursday's Best S&P Turning Points: Neither trade idea triggered. 

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

Short 4002.25 stop 4006.50. Buy 3937.00 stop 3933.25. 

Globex View: Trading above yesterday’s high expecting a melting up or range bound day unless the catalysts are negative.  

The World Sentiment Index: (+100/-100) JUMPS from to +50 with most major world markets bullish. Historically price will close below the open 54% of the time. 

Catalysts: PPI @ 8:30. Consumer Sentiment & Inflation Expectations @ 10:00.  

Quick Tip: DeMark’s Advice

If you haven’t heard of Thomas DeMark, he is arguably one of the most influential technical traders on the planet. His client list is beyond impressive (Goldman, Citi, Tudor-Jones). He has authored dozens of proprietary technical indicators for himself and his...

Results of Wednesday's Best S&P Turning Points: Neither trade idea triggered. 

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

Short 4002.25 stop 4006.50. Buy 3862.75 stop 3857.00.

Globex View: After breaching yesterday’s low, price is making new Globex highs (7:00 ET) with all index futures showing modest gains. 

The World Sentiment Index: (+100/-100) JUMPS from -57 to zero in a world of mixed sentiment. No historical edge.   

Catalysts: Jobless Claims @ 8:30. Not much else. 

Quick Tip: Mistakes

Day trading is my favorite style. I like to see short term results. It does require attention and focus, though. We can make mistakes and need a corrective plan for when that occurs. 

Trading the S&P futures yesterday, we started with a 26.25-point winner. Followed by an 11.50-point winner. Then an 18-point loser. Not unusual for a strategy...

Results of Tuesday’s Best S&P Turning Points: The buy @ 3963.00 stopped out. 

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

Short 4002.25 stop 4006.50. Buy 3922.50 stop 3917.75.  

Globex View: Inside, narrow range trending down. Looking for price to melt down again today but mindful that a relief rally is just as likely. 

The World Sentiment Index: (+100/-100) DUMPS from -14 to -57 with all major world markets bearish. Historically price closes LOWER than the open 56% of the time.   

Catalysts: Productivity & Costs @ 8:30. EIA Petroleum Status Report @ 10:30. Gloomy 2023 predictions from big Wall Street CEOs. 

Quick Tip: Confluence with $TICK

Regardless of your day trading strategy ruleset, you’ll benefit from confluence with other information for both entries and exits. We trade several strategies in our trading...

Quick Tip: Weather Report 

Markets are like the weather. Calm winds and sunny days turn into thunderstorms or worse. Gentle trending days in the market get upset by catalysts that send volatility soaring and price action looking like an ECG. 

Some catalysts are scheduled, like the employment report on Friday that plunged the indexes. Others pop up without warning like a midday comment from a Fed Governor at a benign conference. Back in the day it was a Trump tweet. 

As day traders we certainly need to be aware of all the scheduled (potential) catalysts. We also need to accept that sometimes price will do very unexpected things and we won’t know why. Finding out why is a waste of precious time. Having a plan of action when price action is unacceptable for your strategy is best. 

In our trade room we capture plenty of data about every trade setup across multiple strategies. Catalysts included. This data is analyzed to update...

Quick Tip: Novel Exits Part 2

Yesterday I shared the idea that a good exit may be an opposing signal from a different strategy that you use and know has edge. Reprinted here in italics. 

Let’s say you’re profitably long using a trend strategy and your reversal strategy is signaling short. You have choices, which is better than none.

1. Ignore the reversal signal. 

2. Exit your entire position.

3. Scale out of your position.

Scaling out is a good choice. You’re banking profit and staying in the primary trend. The key is selecting the strategies you’re using. They all need "edge." 

One of our trading team members offered further choices that expand this, and I wanted to share them with you while the idea is fresh in your mind. 

4. Exit (or scale out) at the reversal signal, anticipating re-entering wholly or partially on a pullback. After all, you expect a reaction to the reversal...