Yesterday’s results: Buying 5895.50 picked the bottom of the session and ran for 37.50 points before closing the day +25.50. The short idea didn’t trigger. 

Today’s Best S&P Futures Turning Points: Short 5975.50 stop 5981.25. No long suggestion today. 

The World Index: (+100/-100) drops from -14 to -21 with Asia mildly Bullish and the west firmly Bearish. 

Catalysts: Building Permits/Housing Starts @ 8:30. Fed’s Schmid @ 13:10. Ukraine/Russia war escalation. 

Quick Tip: Art in Exits

Dozens of different methods of trading can be profitable. If you doubt this statement you need to read any of Jack Schwager’s “Market Wizards” books. 

In each book he interviews top traders from around the world. Dozens of them. What you’ll find is that almost every trader has a different take on how to trade. Some use technical indicators successfully. Others focus on algorithms. Still others use fundamentals and macroeconomics. Some are systems traders. Others are discretionary. The list of differen...

Yesterday’s results: : No trades triggered. 

Today’s Best S&P Futures Turning Points: Buy 5936.25 stop 5931.25. Short 6002.75 stop 6007.75. 

The World Index: (+100/-100) drops from -7 to -21 with all major world markets neutral to Bearish on low volatility. 

Catalysts: Retail Sales, Empire State MFG Index, Import Prices @ 8:30. Fed’s Collins @ 9:00, Williams @ 13:15. Industrial Production @ 9:15. Business Inventories @ 10:00. 

Quick Tip: Tuning Your Watch List 

Stock and option traders have a challenge that futures and Forex traders don’t have. How to winnow down your trading candidates from nearly 9000 stocks. 

There are some common filters that are easy to implement like price and volume. Picking stocks that are between $10 and $50 reduces the selection to 2200. Add in average volume over 1 million daily and you’re down to 562. 

You can keep adding filters to get to a manageable number, but you still don’t have any idea about the future direction of the stock. 

And some of th...

Yesterday’s results: Buying 5996.50 stopped out. Shorting the retracement to 5993.50 offered a 6.75-point scalp.  

Today’s Best S&P Futures Turning Points: Short 6032.75 stop 6037.75. Buy 6037.50 stop 6034.75 if price retraces down from above (filtered out during CPI release). 

The World Index: (+100/-100) soars from -71 to zero with the major world markets mixed on falling volatility.  

Catalysts: CPI @ 8:30. FOMC speakers; Kashkari @ 8:30, Logan @ 9:45, Musalem @ 13:00, Schmid @ 13:30. Federal Budget Balance @ 14:00. 

Quick Tip: Trading in the 5th Dimension

You could argue that chart trading is 3-dimensional. You’re analyzing price, volume, and time on a chart.

If you add fundamental analysis to your plan that would be your 4th dimension, and it would very likely improve your performance. Knowing more about the assets, sectors, and economy can only help you. 

There is a Fifth Dimension in trading that will help you even more. Let’s call it “knowing the unknown.” 

The obvious ...

Yesterday’s results: No trades triggered. 

Today’s Best S&P Futures Turning Points: Buy 5996.50 stop 5992.75. Short 5993.50 stop 5997.25 if price retraces up from below. 

The World Index: (+100/-100) plummets from +36 to -71 with all major world markets Bearish on rising volatility. 

Catalysts: Fed Speakers today: Waller @ 10:00, Barkin @ 10:15, Kashkari @ 14:00, Harker @ 17:00, Barkin @ 17:30. 

Quick Tip: Diversify Re-Defined

One of our teams day-trades in the futures market. There is plenty of focus on the S&P 500 contract. Yesterday it traded in a relatively narrow range (31.75 points) and closed down 8 points from Friday. The other indexes weren’t very different. Ho hum. 

Our other team swing trades options. You might think that given the lack of movement in the indexes that the options portfolio would be flat too. It wasn’t. In fact, there were specific options that moved substantially. My portfolio of 20 positions was up 12% for the day reaching an all-time high. 

Surprisi...

Yesterday’s results: No trades triggered. The suggestions stay on the chart. 

Today’s Best S&P Futures Turning Points: Buy 5936.25 stop 5931.25. Short 5932.00 stop 5937.00 if price retraces back from below. 

The World Index: (+100/-100) plummets from +50 to -50 with all major world markets, except Tokyo, Bearish. 

Catalysts: UofM Consumer Sentiment & Inflation Expectations @ 10:00. Fed’s Bowman @ 11:00, Musalem @ 14:30. 

Quick Tip: Parabolic Moves 

Price generally moves in impulses and corrections in both directions. Three steps forward, one back. The trend continues until price moves sideways in a range. Eventually a new trend starts. Look at plenty of charts and notice this repetitive pattern. 

Sometimes the trend portion of the pattern doesn’t move in impulses and corrections. It’s a smooth series of vertical candles, a parabolic move. Look at the S&P daily chart right now, it’s up 250 points, 4.5% in three days. 

Seemingly “overbought” conditions can persist so fighting this...

Yesterday’s results: No trades suggested. 

Today’s Best S&P Futures Turning Points: Buy 5936.25 stop 5931.25. Short 5932.00 stop 5937.00 if price retraces back from below (filtered out during FOMC volatility). 

The World Index: (+100/-100) eases up from +36 to +50 with most major world markets Bullish. J

Catalysts: Jobless Claims & Preliminary NFP @ 8:30. Wholesale Inventories @ 10:00. FOMC Statement @ 14:00, Press Conference @ 14:30. 

Quick Tip: Confirming Trend

If you trade a trend strategy you know that the biggest challenge is filtering out the whipsaw, range-bound conditions. Arguably the king of using Wilders’s RSI indicator for trend identification was the late Andrew Cardwell. 

His quote applies to all trading but especially for trend trades: “You do not have to make a lot of trades you just need to make a few good trades.”

Cardwell introduced the concept of “Range Shift” using RSI to determine bullish versus bearish conditions. Basically, RSI ranges from 40 to 80 during...

Yesterday’s results: Buying 5789.50 stopped out. The short idea didn’t trigger.

Today’s Best S&P Futures Turning Points: Buy 5705.75 stop 5699.00. Short 5696.50 stop 5702.25 if price retraces up from below.  

The World Index: (+100/-100) jumps from -43 to +21 with most major world markets Bullish on relatively low volatility. 

Catalysts: Non-Farm Payrolls @ 8:30. S&P MFG PMI Final @ 9:45. ISM MFG PMI @ 10:00. 

Quick Tip: Time Horizon

Establishing the time horizon for your trades is critical. You’re committing capital, which is limited, to get a result. Deciding on the win or loss amount is not enough. You should have a “time” stop as well to free up the capital for another opportunity. 

Here’s an example: 

Our swing trading strategy for equities and options utilizes a key catalyst for stock selection: Large Insider buying. Why? Because Insiders know best about the prospects of their company. Historical research validates this. 

Large options speculators are another great leadin...

Yesterday’s results: Buying 5939.00 stopped out. The short suggestion didn’t trigger. 

Today’s Best S&P Futures Turning Points: Buy 5851.50 stop 5846.25. Short 5904.50 stop 5909.50.

The World Index: (+100/-100) rises from +7 to +14 with mixed sentiment on low volatility. 

Catalysts: Durable Goods @ 8:30. UofM Consumer Sentiment & Inflation Expectations (revised) @ 10:00. Fed’s Collins @ 11:00. Final day of IMF meeting. 

Quick Tip: Change It Up

Great performers, traders included, never quit when the inevitable roadblocks and challenges arise. They learn from their mistakes, adjust, and move forward. 

You’re heard the term “reinvent yourself.” Out of favor actors do it. Corporations do it. Sometimes traders must do it. 

Like many traders who enjoyed the Tech Bubble in the late ‘90’s, I was trading a momentum strategy that printed money. It was simple and easy. Even during the crash, it performed well going short. Then it stopped working. The volatility dried up and the risk reward...

Yesterday’s results: Shorting 5869.00 stopped out. The long suggestion didn’t trigger.  

Today’s Best S&P Futures Turning Points: Buy 5939.00 stop 5834.25. Short 5895.00 stop 5998.25. 

The World Index: (+100/-100) rises from -14 to +7 with the East bearish and the West bullish. 

Catalysts: Jobless Claims @ 8:30. Fed’s Hammack @ 8:45. S&P MFG/Service PMI Flash @ 9:45. New Home Sales @ 10:00. 

Quick Tip: Update Your Plan

Your trade plan probably started out simple. You had rules for entry, exit, risk, position size, candidate selection, and some filters for changing market conditions. The historical performance was positive. Great start. 

Once you started trading real money you likely encountered trade setups that didn’t make sense at the time. What to do? Grit your teeth and follow the rules? Pass on the trade? 

You felt compelled to be a rule-based trader, but your growing experience and skill level is telling you not to take the trade or maybe even take a trade that comes close...