Market #'s at Close:
Dow: 164 to 11,433
S&P: +17 to 1,249
NASDAQ: +30 to 2,258
RUSSEL2K: +1.84 to 719
TSX/S&P: +115 to 12,612
VIX: -0.17
Internals:
NYSE BREATH: 2:1
NASDAQ BREATH: 2.3:1
NYSE TRIN: .4
NASDAQ TRIN: .45
AD LINES: NYSE- -358 / NQ- -260
Core Sector List: 14/2
ES Chart:(Click thumbnail to enlarge)
Welcome active traders and newbies alike, it today's edition of the Marketbeat I'm going to discuss today's market action and try to put into context of the big picture. If one were to look at a daily chart of the ES E-Mini Futures (/ESU8) you would see that on a bit of a longer term scale, the market seems to put in a double bottom. Today's big bottoming tails is a good sign of this combined with Fridays bottoming tail might suggest that we could look to test the prior highs (1265 area). However (ya there's always a catch), when you break the chart of the ES into a faster time frame (for example a widely used model of 2 day 15 min chart) you can see that we also could be in for a sharp drop Friday morning after Thursdays big buy action towards the close. If I HAD to make a call on tomorrow action, id say to watch the futures in the morning to see if we start the day with a gap down, however if this gap down holds 1245 on the ES (11300 on the /YM) we could see a buy bounce off that gap, and possibly a gap fill to end off the week. This is only one possible scenario, we could see a total lack of support and sell off to the lows, or just diddle daddle around all day. The important thing is to set your trade plan for all possible scenarios and let the market show its hand first
Internals Chart: (Click thumbnail to enlarge)
Under the hood the internals were mixed intraday, but closed to the Bulls side - with the NYSE and NASDAQ Breaths closing at 2:1 and 2.3:1 respectively. The Trins closed around 0.4 for both NYSE and NASDAQ, while the Core Sector list came in nicely to the bulls @ 14/2. The key thing to watch tomorrow morning into the open is the Futures markets, after that huge green candle into the close on rumours of Bank of America bailing out Lehman Bros we could easily see that jump up quickly take the express elevator to the wood shed. The important thing is to plan your trade, and trade your plan
Food 4 Thought to Use with Stock:
Today I wanna talk about putting a routine together, this section will probably better serve someone new to trading, but I feel it could help even an experienced trader. Having a well oiled routine for the week and weekend is an intricate aspect to trading successfully, up there with having a trading plan, and strategies to implement. Personally I have found that keeping a routine is good to retain focus and keep your mind on whats important intra-day, I try to keep my intraday focused towards stock and trading related info. Post trading hours, I focus on my recap and studying. I also like to keep my mind sharp reading books on Inner game and other helpful areas. At the end of the day I usually give the charts one last glance, set up my next days ideas and notes and relax. Listen to some music or take a walk. The weekends can prove a very useful time for traders as most traders may not have the time during the week to do homework or follow whats going on, in this case I use weekends to catch up on the news in the market, and go over my Top down analysis before the new trading week comes. One good addition to this is the Shadow trader Sunday weekly video (click here to subscribe). Whatever your routines consist of, remember that if you treat trading like a Hobie, it will yield returns like a hobby, but if you treat it like you're business, it will yield like a business. Take the time to make up your plan, work on strategies and map out your personal routine. It will pay in less emotions, and more fun trading....
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