Afraid to Trade Blog - Latest Comments in Daily Market Internals Now Failing to Confirm Rally from March Lows

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

Snow_s4 — Mon, 02 Nov 2009 15:03:54 -0000

Corey, one of the interesting relationships in this market recently is a change from "weak bears" to "weak bulls" - it seems like the traders with less conviction are the ones who set their stops closest to the most recent support/resistance, where as your longer term value investors and fund managers are the ones who are stepping in to control the market are not so weak, they are playing for the longer term. It seem like this relationship of which side of the market is showing more weakness are the longs at this point, with very tight stops causing some quick covering whenever they are popped -

I'm curious have you looked at this relationship between longer/shorter term traders and how they affect the market?

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

Dan de Man — Fri, 30 Oct 2009 16:26:55 -0000

Your welcome terlyn. There's nothing wrong with being cautious. Keeping losses small is the key. I've traded 13 winners and 13 losers this month, BUT my accounts are up significantly because all the losses are small and all the winners are big.'

Take care and I wish you all the best,
Dan

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

terlyn — Fri, 30 Oct 2009 16:05:29 -0000

Thanks, DAN. The amount of time I spend studying, you'd think I'd be making buckets of money. I'm a cautious trader, to say the least. I hope it pays off.

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

Dan de Man — Fri, 30 Oct 2009 15:38:13 -0000

Congratulations terlyn! It's the world's best horse track, isn't it? You got to love it!

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

terlyn — Fri, 30 Oct 2009 15:18:10 -0000

Finally made a well-executed day trade thanks to you, Corey! Next time I'll buy more shares.

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

Dan de Man — Fri, 30 Oct 2009 15:14:08 -0000

Sorry, I meant to say "That's got to be exciting for the BEARS"

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

Dan de Man — Fri, 30 Oct 2009 15:13:22 -0000

VIX has broken through the 200ema That's got to be exciting for the bulls. But, I bet you they get pounded by a short covering rally on Monday as we're right on edge of the bband.

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

terlyn — Fri, 30 Oct 2009 14:27:29 -0000

Thanks so much, Corey.

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

Dan de Man — Fri, 30 Oct 2009 13:43:16 -0000

Thanks for the article Corey! IMHO If you don't know which way the market is going to go for a swing trade, you have to day trade. Enter at the open, exit at the close. Today you would buy a bear etf. Hey I love the 2x HOD.to but I'm going to park my money for the weekend and start all over again on Monday. If I see a good swing trade setup in the coming days, then I'll shoot for a swing trade. Hey, you have to admit that this action in the last week is pretty good for all traders.

Have a great weekend Corey!

Cheers,
Dan

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

Corey Rosenbloom, CMT — Fri, 30 Oct 2009 13:29:36 -0000

In theory, price could have supported off the $105.75 support area which defined the lower boundary of the descending triangle. The EMA structure turned negative at 10:40 EST.

I think trend days are confirmed by watching price itself (lower lows and lower highs), EMA structure (20 under 50 EMA, and that price is beneath them both) and watching for new TICK and momentum lows. Also watch for higher volume relative to prior days.

There's no magic formula - just assess structure and probabilities and know the 'warning signs' and watch closely until enough data falls into place to favor a 'positive feedback' (new shorts entering + long/buyers getting stopped out) environment.

Then monitor everything throughout the day to ensure the structure and 'positive feedback' continues.

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

terlyn — Fri, 30 Oct 2009 13:24:39 -0000

So if not confirmed, what does one do in the meantime? I wanted to get in, but was "afraid to trade" : at the beginning. Finally guessed it was a down day.

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

Corey Rosenbloom, CMT — Fri, 30 Oct 2009 13:20:18 -0000

Thanks Terlyn!

I spent the last two reports focusing on teaching Trend Day trading techniques - I'm glad to hear it's paying off!

It usually takes about an hour or so to conclude odds favor a trend day - need to know at least the first hour's structure. But by the 2nd or 3rd hour - the structure is usually clear which allows aggressive trading for as long as internals and price confirm.

For example, today, wasn't objectively convinced of the down trend bias officially until the descending triangle and support line broke around 11:30 EST.

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

terlyn — Fri, 30 Oct 2009 13:17:57 -0000

I think I'm finally getting it thanks to your Idealized Trades! It's just the beginning of the day that I'm never sure of.

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

Corey Rosenbloom, CMT — Fri, 30 Oct 2009 13:08:45 -0000

Certainly looks like one so far! Would stay/continue shorting as long as price is under 5-min EMA and TICK/Breadth continue to confirm the negative posture.

Re: Daily Market Internals Now Failing to Confirm Rally from March Lows

terlyn — Fri, 30 Oct 2009 13:06:58 -0000

Thanks. I am hoping this is another trend day.