Info!! Recognizing Reversal Patterns Inwards The Stock Market

The S&P 500 Index (ES futures contract; give chart) staged a overnice turnaround inwards afternoon trading. An of import clue to the turnaround was that nosotros returned to prior days' back upwardly as well as and then subsequent selloffs inwards NYSE TICK (bottom chart, blueish arrows) could non generate lower toll lows. With sellers unable to force the marketplace lower, nosotros saw a flurry of buying inwards TICK belatedly inwards the afternoon, enabling ES to retrace its day's losses. Recognizing these patterns equally they emerge is a commutation chemical ingredient of trading success; turnarounds frequently hap when buyers/sellers cannot motion markets higher/lower, emboldening fresh sellers/buyers to piece of occupation into the market.
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Info!! Caput As Well As Shoulders Bottom Inward The Stock Market?

my weekly indicator reviews. Rather, it is a uncomplicated cumulative substance of one-minute average TICK values. What this shows us is relative buying together with selling pressure. We tin dismiss encounter that the Cumulative TICK has been on the rising since the Nov bottom, merely has been rising at a far to a greater extent than gradual stride than it brutal during the prior decline.

While I'm opened upward to the possibility of a head-and-shoulders reversal bottom, the actual buying together with selling line per unit of measurement area across NYSE issues is as consistent amongst a designing of lower highs together with lower lows inwards a behave market. I would similar to encounter an upside acceleration of the cumulative TICK business earlier I stick my caput together with shoulders inwards a possible behave guillotine.
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Info!! Trading The News: When Bad Intelligence Can't Proceed A Marketplace Put Down

Here's a swell event of a worthwhile marketplace set pattern. We got some horrendous economical word regarding housing together with consumer confidence approximately nine AM CT, together with the ES futures (chart above) dropped below their morn range. They rapidly rebounded together with moved solidly dorsum into the range--an first-class say that bad word could non dampen the vacation spirits of traders. We thence broke inwards a higher house the morn hit on company volume, momentum, together with NYSE TICK, leading us higher through the day.

Markets that cannot rising on expert word together with that cannot drib on bad word render useful data for active traders. It's non the word itself, only the market's reply to the word that is nearly of import to track. That agency that it's of import to know which economical reports are coming out when together with what the expectations are. My morn Twitter posts include a listing of of import economical reports together with when they're coming out, which provides a heads upwards for seeing how markets merchandise at those times.
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Info!! Cash Non All The Same Manlike Mortal Monarch When It Comes To Marketplace Performance

With the credit compaction upon us, ane powerfulness facial expression relative stock marketplace outperformance from cash-rich companies that tin finance their ain expansions, accept wages of undervalued companies for strategic acquisitions, together with ride out cyclical declines inwards business. According to Financial Times, vi publicly held U.S. companies that concur the close cash are (billions USD):

Berkshire Hathaway (BRK.A): 106.1
Exxon Mobil (XOM): 28.2
Apple (AAPL): 24.5
Cisco Systems (CSCO): 19.9
Microsoft (MSFT): 18.7
Google (GOOG): 14.4

Since Nov (chart above), these stocks equally a whole stimulate got non outperformed the S&P 500 Index (SPY; left close column on chart). Nor stimulate got they outperformed on a year-to-date basis; all, except XOM, are downward to a greater extent than than 35%, spell SPY is downward 39%.

This volition last an interesting grouping of stocks to follow going forward. While they concur an impressive stash of cash to weather condition economical storms, annotation that the entire grouping holds less than one-half of the $700 bn authorities resources allotment to TARP, mayhap obscuring the value of their financial prudence.

Interestingly, the greatest prudence belongs to China: 3 of the orbit 4 cash asset companies worldwide are Chinese banks, spell Communist People's Republic of China Mobile checks inwards at set out six.
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Info!! When Programme Selling Cannot Force The Wide Stock Marketplace Lower

The bluish lines stand upwards for x menses moving averages for one-minute charts of the ES futures (top chart); Dow TICK ($TICKI; middle chart); in addition to NYSE TICK ($TICK; bottom chart); click on charts for detail. One of my real short-term setups occurs when nosotros top selling clit per unit of measurement area inwards $TICKI that is non matched past times commensurate selling clit per unit of measurement area inwards $TICK. This typically occurs when programme selling affecting large cap issues are non pulling the wide marketplace lower. By waiting for the programme selling to abate, equally it did prior to ii PM CT, nosotros tin ofttimes grab a prissy popular upwards inwards the ES futures, equally the large caps grab upwards to the wide marketplace strength.
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Info!! Hints Of Peril Appetite Inwards The Stock Market

As 2008 came to a close, many of the headlines recapped how bad a twelvemonth it was for the stock market. Several marketplace indicators, however, were showing interesting improvement. At Wednesday's close, nosotros had 256 NYSE, ASE, as well as NASDAQ stocks registering fresh 65-day highs against 144 lows, the strongest reading since September. On a shorter-term trending basis, nosotros had four stocks from my handbasket inward uptrends, xi neutral, as well as 25 inward downtrends at Monday's close. By Midweek that had improved to 25 stocks inward uptrends, vi neutral, as well as nine inward downtrends.

When reviewing information from the Decision Point site, I was especially interested to encounter that the advance-decline business specific to midcap stocks (top chart) had bested its Nov peak, moving to a multi-month high. We're too seeing an increasing proportion of stocks--nearly one-half across the NYSE--trading higher upwards their 50-day moving averages (bottom chart).

The depression 900 expanse remains of import resistance for the S&P 500 Index, simply minor cap as well as midcap stocks are already breaching their equivalent levels to the upside. That suggests a well for you lot grade of risk appetite with equity investors. That same appetite has been driving prices upwards for intermediate-term corporate as well as municipal bonds, every bit investors seek greater returns inward a naught involvement charge per unit of measurement world. With a weak USA dollar as well as continued overseas conflict, we're too starting to encounter increasing signs of life inward the commodity markets. Short-term Treasury prices, meanwhile, are hovering close several-week lows.

I volition survive next these themes closely every bit nosotros showtime the New Year, because they volition give us of import clues every bit to whether deflation themes volition morph into inflationary ones inward the wake of unprecedented financial as well as monetary stimulus. Should that occur, nosotros could encounter quite a shift out of security assets (Treasuries) as well as into riskier ones (stocks, bonds, commodities).
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Info!! Trading Together With Marketplace Pose Psychology: Best Of 2007 - Book One

In coming days, I'll last reviewing kickoff the best trading as well as marketplace psychology posts from 2007, thence we'll produce got a await at the best of 2008. For a await at 2006, produce got a await at my Trading Coach blog. Here are the selections from the kickoff quarter of 2007:

Therapy for the Mentally Well

The First Steps of Brief Change

Becoming the Actor of Your Ideals

Programming Your Experience

Four Qualities of Successful Traders

My Trading Framework

Coaching Yourself to Let Profits Run

Personality as well as Trading Performance

Personality Questionnaire for Traders

Interpreting the Personality Questionnaire

Subjective Well-Being as well as Trading

Improving Well-Being

Transforming Stress Into Well-Being

Good Trade Execution

Keys to Trading Success

Tracking Large Traders inward the Markets

Identifying as well as Trading Breakout Moves

Somatic Markers as well as Trading Decisions

Five Guiding Principles of Trading Psychology

Best Practices inward Trading

Resilience as well as Courage of Your Convictions

Trading Opening Range Breakouts

Psychological Risk Management

The Epistemology of Trading Expertise

Why Traders Self Sabotage

Why Traders Don't Trade Their Plans

Happy New Year!
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Info!! Psychological Merchandise Setups: Managing Your Unloose Energy Equally A Trader

An sharp portfolio director emailed me implicit learning equally a fundamental to trading performance together with biofeedback equally useful inward the rule of hear together with body. This rule enables traders to sustain access to what they tacitly know. Intuition does non simply come upward to traders; it has to live on actively received. Influenza A virus subtype H5N1 large role of that reception is maintaining a clear hear amongst focused concentration. To the bird that traders are immersed inward self-talk nigh markets--how much they've made, lost, should accept made, shouldn't accept lost--they are no longer immersed inward the patterns that underlie trading decisions.

The HBR article is useful inward pointing out that performers tin train, non exclusively for their competitive events, but for the infinite that occurs betwixt competitions. We unremarkably focus on marketplace setups; the fundamental to success, however, mightiness live on setting ourselves upward for the side yesteryear side trade.
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Info!! Trading As Well As Marketplace Psychology: Best Of 2007 - Book 2

Here are the meridian posts from the moment quarter of 2007; starting fourth dimension quarter can hold upwardly establish here, together with 2006 is here:

Trading Techniques

Visiting a World Class Trader

When Coaching Works together with Doesn't Work

Trading together with Poker

Changing Your Self-Talk

Information Processing Biases inward Trading

What to Do If You're Losing Money

The Most Dangerous Word inward Traders' Vocabulary

Performance Anxiety

Handling Performance Pressures, Part Two

Solution-Focused Linkfest

Finding a Trading Coach

Short-Term Market Transitions

When Coaching Doesn't Work - Part One, Part Two

Assessing Trader Personality

Heroic Dimensions of Trading

Becoming Your Own Coach

Trading Transitional Structures

Trading Discipline

Attribution together with Cognitive Bias

Trade Like a Scientist - Part One, Part Two, Part Three

What Makes a Trader's Marriage Work

How Can I Learn Trading?

Assessing Your Strengths

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Info!! To A Greater Extent Than Indications Of Opportunity Appetite Inwards The Stock Market

My before post institute signs of buying involvement alongside the indicators that I follow daily; keeping on peak of those indicators before each trading twenty-four threescore minutes catamenia via the Twitter posts is a overnice means to chop-chop position if the stock marketplace position is gaining or losing forcefulness over time. The final 5 posts seem on the weblog page nether "Twitter Trader"; I typically post service inwards the mornings (before the marketplace position open) together with evenings (after the close). Alternatively, you lot tin opt for a complimentary subscription via RSS.

This post service takes a longer-term await at the functioning of several ETFs since the Nov marketplace position bottom: the S&P 500 Index (SPY); the Russell 2000 Index (IWM); the EAFE (Europe, Australasia, Far East) Index (EFA); the Emerging Market Index (EEM); Consumer Discretionary Stocks (XLY); together with Consumer Staples Stocks (XLP).

What nosotros run across is that the riskier sectors that had been to a greater extent than beaten downward during the marketplace position turn down are straightaway outperforming: small-scale caps together with emerging marketplace position issues. We're too seeing outperformance alongside consumer discretionary shares relative to consumer staples issues, every bit investors plough away from the to a greater extent than defensive sector together with bet on economical recovery.
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Info!! Tracking The Book Of Private Trades Inwards Es Futures

I was taking a await at the distribution of book for the ES futures for trades during the offset one-half of Friday's trading session. Of detail interest:

* Trades of twenty contracts or to a greater extent than made upwards almost 7% of all trades, but accounted for almost 56% of all book inward the ES contract;

* Trades of 10 contracts or to a greater extent than constituted a picayune less than 15% of all trades, but comprised a picayune over 70% of all volume;

* One-lot trades accounted for slightly nether 50% of all trades, but exclusively almost 8% of full volume;

* Trades of 100 lots or greater accounted for exclusively almost .6% of all trades, but almost 15% of full volume.

Many professional person traders merchandise inward lots of 100 contracts or more, but it is rare for these traders to execute trades inward such large blocks. Rather, they utilise clerks and/or automated algorithms that ordinarily interruption their blocks into smaller pieces of 10 contracts or more. While it is possible that a run-of-the-mill retail trader mightiness move executing twenty contracts or to a greater extent than at a time, that is the exception, given high retail commissions. More often, these larger trades are placed past times prop traders or are work of larger block executions from institutions.

Where are large trades hitting the market? At breakout levels? At the bid? At the marketplace offer? Early inward the day? By tracking *who* is inward the marketplace as well as when, nosotros tin infer of import persuasion trends as well as shifts inward the stock market.

RELATED POSTS:

What Every Short-Term Trader Should Know

Reading the Market
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Info!! Resilience: Behind The Spirit Of A Warrior

I had a dissimilar ship service planned from this morning, exactly I'm linking my Best of 2006 series.
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Info!! Trading Together With Marketplace Grade Psychology: Best Of 2007 - Book Three

Here's the latest installment inwards the "Best Of" series, roofing the tertiary quarter of 2007. The before best posts from 2007 can live on constitute here too the best of 2006 is here.

Steps Toward Joining a Prop Firm

Underconfidence too Overconfidence inwards Trading

Using Imagery to Accelerate Behavior Change

Ten Principles of Short-Term Trading

Winning Trades vs. Making Money

Trading too Learning Styles

Assessing the Learning Styles of Traders

One of My Best Market Posts

Trader every bit Entrepreneur

When Traders Lose Confidence - Part One, Part Two, Part Three

Five Steps Toward Self-Coaching

Very Important Post on Trading too Pain

Life Lessons From Mali

Trading too Emotional Well-Being

Our Moods too Our Trading; Here is a Mood Questionnaire

Our Emotional Style

Coping Strategies; Stress too Coping; Coping too Intuition; Assessing Your Coping Style

Improving Your Coping

Goal Setting for Traders

How Problem Patterns Develop

The Importance of Emotional Experience inwards Change

Making the Right Decisions Under Conditions of Fear

Using Emotion to Change Emotion

Making Cool Decisions With a Hot Head

Ayn Rand, Objectivism, too Trading

Trading too Worry

Trading With a Philosophy

Somatic Markers During Trading

The Psychology of Losing

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Info!! Sector Update For January 4Th

Last week's sector update establish continued make outflow weather condition for the 8 S&P 500 sectors that I rails alongside the Technical Strength indicator of short-term trending. With the pause higher upwards substitution resistance inwards the depression 900 degree on the S&P 500 Index, the Technical Strength readings looked quite dissimilar yesteryear Friday's close:

MATERIALS: +40 (86%)
INDUSTRIAL: +320 (98%)
CONSUMER DISCRETIONARY: +400 (95%)
CONSUMER STAPLES: +360 (93%)
ENERGY: +380 (100%)
HEALTH CARE: +460 (95%)
FINANCIAL: +20 (83%)
TECHNOLOGY: +320 (96%)

Clearly the tendency has turned upwards across the sectors, though Materials as well as Financial shares lag the group. The potent bounce amidst Technology as well as Consumer Discretionary shares suggests that recovery themes may last trumping recessionary ones to get-go 2009.

When nosotros expect at the per centum of stocks inwards each sector trading higher upwards their 20-day moving averages, equally assessed yesteryear Decision Point, nosotros tin meet the distinct intermediate-term uptrend next the breakout. Even amidst the 2 lagging sectors, the cracking bulk of issues are trading higher upwards their 20-day averages.

While the sectors are extended relative to those 20-day averages, nosotros are nowhere most overbought alongside honor to longer-term 50- as well as 200-day averages. If indeed nosotros stimulate got set inwards an of import bottom inwards November, nosotros should last able to back upwards a rally that would eventually accept us into overbought territory on a 200-day basis.

Note that I update Technical Strength figures each morn earlier trading days via Twitter; RSS subscription to the indicator as well as link updates is free.
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Info!! Indicator Update For January 5Th

Last week's indicator review concluded, "The depression 900 surface area continues to serve equally of import resistance for the S&P 500 Index; a interruption higher upward that flat accompanied yesteryear rigid sector participation as well as novel high forcefulness would hold upward an of import indicate for longer-term bulls." We did, indeed, encounter such an upside break, equally forcefulness became evident among the indicators as well as stock marketplace sectors as well as indexes. Indeed, the sectors are straightaway clearly inwards a bullish mode, having broken from their multi-week trading range.

The Cumulative Demand/Supply Index (top chart) is quite stretched to the upside, but banker's complaint that we're seeing a designing of higher highs, alongside pullbacks remaining higher upward the nil level. That persistence is typical of bull marketplace action. During bull phases, pullbacks inwards the DSI toward a neutral surface area typically indicate practiced entries for swing positions to the long side.

Note how we've likewise seen a sizable increase inwards novel 20-day highs vs. lows (second chart), indicating wide participation inwards the marketplace rally. The Cumulative Adjusted NYSE TICK (third chart) has moved solidly to novel highs; banker's complaint the increase inwards its slope, equally buyers lifted offers inwards size during the marketplace breakout.

Money stream for the Dow Industrial issues, piece non at novel highs, has been moving steadily higher (bottom chart) over the concluding 2 weeks.

We are clearly overbought as well as some grade of short-term pullback is expected. If, indeed, nosotros bring position inwards an of import marketplace depression as well as entered a bull phase, the ascension should hold upward a multi-month affair, non a brief rally. New 20-day highs should proceed to outnumber lows, as well as pullbacks should remain good higher upward concluding week's cost lows. Particularly supportive of the bull motion would hold upward a relatively apartment corrective stream inwards which the onetime resistance roughly 900 inwards the S&P 500 Index becomes support. Influenza A virus subtype H5N1 motion dorsum into the trading range, especially on high book as well as weak NYSE TICK, would pose of import questions for bulls.

A review of concluding week's indicator information that I post service each morn earlier trading days via Twitter volition clearly demo the development of the market's strength. These information are especially useful inwards identifying whether markets are strengthening, weakening, or remaining arrive at bound. This tin hold upward helpful inwards keeping traders from fighting trends--or assuming trends when none exist. The information tin hold upward observed on the spider web log page nether "Twitter Trader" or are available via gratis RSS subscription.
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Info!! Run A Jeopardy Seeking Or Run A Jeopardy Averse: The Mood Of The Markets

risk appetite for the instruments nosotros are trading.
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Info!! Trading Together With Marketplace Set Psychology: Best Of 2007 - Book Four

This is the end of the 2007 "best of" installments, roofing the 4th quarter of the year. The best posts from before inwards 2007 can locomote flora here; the best posts from 2006 are here.

Knowing Your Strengths

Emotional Balance inwards Trading

Identifying Your Edge

The Cognitive Development of Traders

Ten Short-Term Trading Guidelines

Regret as well as Trading

Keys to Emotional Resilience inwards Trading

How to Change Yourself

Self-Evaluation as well as Success

Preparing for the Day's Trade

Four Common Trading Problems

Trade Like a Card Counter

Finding Your Voice every bit a Trader

Considerations RE: Trading for a Living

Common Stresses Faced yesteryear Traders

Stress as well as Cognitive Regression

The Psychology of Scarcity as well as Abundance

Self-Confidence as well as Performance

Six Positive Trading Behaviors

Signs of Burnout

Cultivating Self-Awareness

Trading as well as Anxiety

Turning Setbacks Into Goals

Trading Myths as well as Questionable Assumptions

Achieving Emotional Self-Regulation

When Trading Performance Declines

Predictors of Coaching Success

Greatness, Happiness, as well as Performance

Physical Exercise, Self-Efficacy, as well as Well-Being

Living a Purposeful Life

The Brain as well as Trading Performance

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Info!! Defining Net Turn A Profit Targets As Well As Formulating Targeted Trading Plans

In a past times post, I wrote close how I usage pivot-based back upwards as well as resistance points to institute cost targets for merchandise ideas. The basic approach is to define potential targets inward advance as well as and hence usage unfolding price/volume/indicator activeness to handicap the odds of hitting those targets. For example, in 1 lawsuit I come across the Cumulative NYSE TICK trending higher, I volition larn into a long seat to striking the R1 as well as R2 cost targets. (Please consult that before post service for details re: conventional ways of calculating the upside R1/R2 as well as downside S1/S2 targets).

In general, I've found those conventional ways of calculating targets to survive helpful, but non optimal. My electrical flow methods of calculation are based on historical analysis going dorsum to the yr 2000. Since that time, the P pin grade from the previous solar daytime has been touched past times the marketplace seat during regular trading hours close 75% of the time. The marketplace seat touches the S1 *or* the R1 grade calculated from the previous day's information close 75% of the time. The marketplace seat touches the S2 *or* the R2 grade close 55% of the time.

Let's order that SPY opens close its pin (P) level. The marketplace seat chops unopen to inward the get-go one-half hr of trading as well as and hence moves briefly lower on negative economical tidings at 9 AM CT. The NYSE TICK, however, goes alone modestly negative as well as chop-chop bounces dorsum to positive territory, equally SPY moves inward a higher house P. Noticing the upward tendency inward TICK as well as the themes of risk-seeking across related property classes, I hold back for the get-go pullback inward TICK that stays inward a higher house P as well as and hence larn long SPY alongside a target of R1. If TICK turns negative as well as nosotros motion below P--a sign of a make day--I volition halt my seat alongside a pocket-size loss. If nosotros boot the bucket along to come across buying interest, I volition consider adding to the seat on the agency to the target(s) on pullbacks inward TICK.

Should the upswing locomote on alongside strong TICK on enhanced volume, the odds of hitting R2 are enhanced, as well as I volition leave of absence at to the lowest degree a slice of the seat on to striking that target. Because book is closely correlated alongside volatility, keeping tabs on relative volume--how today's book compares alongside the 20-day average--is quite useful inward estimating the odds of hitting R2 or S2.

My newer, proprietary agency of calculating P, S1/S2, R1/R2 adjusts the targets for the market's volatility, hence that I'll naturally try to a greater extent than pocket-size moves inward slower, narrower markets as well as larger moves inward to a greater extent than active, volatile markets. Because I target the exits inward advance, I'm meliorate able to guess the risk/reward of each merchandise past times comparison how much I'm willing to lose inward the merchandise (the distance to my halt point) alongside how much I stand upwards to gain. This makes the target points really useful inward merchandise planning.

For traders who mightiness survive interested, I'll get posting the SPY target levels for the day's trading each morn equally purpose of my Twitter service. Also included inward the morn Twitter posts volition survive the commons indicator information (new highs/lows, Demand/Supply, % stocks inward a higher house moving averages, Technical Strength readings for the handbasket of twoscore stocks). By comparison the most recent day's information alongside the information from the prior day, you lot tin forcefulness out guess whether the marketplace seat is gaining or losing strength solar daytime over day. As a rule, I'll await for strong/strengthening markets to striking R1/R2; weak/weakening markets to striking S1/S2; as well as mixed/range markets to revert toward P.

Future posts volition illustrate the usage of these target calculations inward merchandise setups. The morn indicator as well as target information volition look nether "Twitter Trader" on the spider web log page prior to the marketplace seat open, or you lot tin forcefulness out subscribe via RSS gratis of charge.
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Info!! Trading Autobus Spider Web Log In Addition To Other Wednesday Potpourri

* Trading Psychology Resource - As yous browse through the novel Daily Trading Coach book, which is An Introduction to Trading." The complimentary mass volition focus on trading methods too volition last written 1 post/chapter at a time.

* Twenty-Day Strength - Tuesday was notable inward that nosotros had 3289 novel 20-day highs across the NYSE, ASE, too NASDAQ, equally opposed to 119 novel lows. New 65-day highs were less elevated: 632 vs. 55 lows. That is the highest grade of novel 20-day highs that we've seen since I began collecting these information inward September, 2002. Interestingly, since that time, we've had 42 occasions inward which novel 20-day highs convey exceeded 2000. Twenty days later, the S&P 500 Index (SPY) was upwards xxx times, downward 12 for an average attain of exclusively .01%. Across all other occasions, the average 20-day attain was .19% (936 up, 590 down). Interestingly, when nosotros behaviour a median split upwards of the occasions when 20-day highs were rigid based upon whether 65-day highs were elevated or not, nosotros meet a difference. When 20-day highs *and* 65 24-hour interval highs convey been elevated (N = 21), the adjacent twenty days inward SPY convey averaged a attain of 1.65% (18 up, iii down). When 20-day highs convey been elevated simply 65-day highs convey non (as was the illustration yesterday), the adjacent twenty days inward SPY averaged a loss of -1.62% (12 up, nine down). This reflects worse outcomes when 20-day highs spike during longer-term behaviour marketplace conditions.

* Attention Bloggers: Twitter Links - I proceed to encourage bloggers to ship me URLs to posts that would last of particular relevance too uniqueness to readers, too thus that I tin scope notice link via Twitter. (My e-mail address appears nether the "About Me" department of the weblog page). Among the posts of detail involvement would last those related to trading psychology; research-based posts; too posts amongst unique analytical content/perspectives. Over 1500 traders straightaway subscribe to the Twitter service, too a larger publish of readers selection the posts off the weblog page. This provides me amongst a agency of linking to--and recognizing--the expert operate out there. Thanks, too thank yous likewise to readers who ship me interesting article links that they stumble across!
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Info!! Keys To Solution-Focused Trading

Many traders try assistance for the problems they run across inwards markets. They are focused on the holes inwards their trading: the areas where they are failing to make their goals. They mean value nearly their problems, they laid goals to right their problems, they operate on their problems, they hash out their problems. In a nutshell, they boot the bucket work focused. The to a greater extent than they focus on their deficits, the to a greater extent than they experience deficient. Ironically, their efforts at self-improvement exclusively serve to reinforce a negative, problem-based sentiment of themselves.

A dissimilar approach is what is known equally a solution-focused approach to change. Instead of focusing on what is going wrong, yous focus on goals: what yous desire to boot the bucket right. Once yous identify--in concrete, positive terms--what you'd similar to hold upwards doing differently, thence yous tin post away focus on occasions inwards which yous are already achieving those goals, fifty-fifty inwards modest measure. Instead of call for a trading guru, for example, where yous should house your stops or fourth dimension your entries, yous review your ain trading records as well as position occasions inwards which yous *did* house your stops or fourth dimension your entries effectively. This enables yous to reverberate on these positive instances as well as educate solution patterns out of the things you're already doing correctly.

Solution-focused alter industrial plant because it builds on a person's existing strengths, affirming competence as well as finding answers to problems that are valid for each individual. The commutation is to expect for exceptions to work patterns: specific instances of trading when yous *don't* brand the mistakes that problem you, as well as when yous *do* merchandise well. These exceptions boot the bucket the foundation of solutions that tin post away hold upwards rehearsed over time, inwards heed as well as inwards one's trading practice.

The simplest periodical I recommend novel traders boot the bucket on is merely to identify--each day--one thing that yous did incorrect that you'd similar to right the side past times side solar daytime as well as i thing that yous did right that you'd similar to construct upon tomorrow. The argue for this periodical format is that it balances the work emphasis alongside a solution focus. If yous exclusively better your deficits, at best you'll boot the bucket from deficient to average. The elite performers inwards whatever champaign position their strengths, construct on those, as well as respect ways to compensate for as well as operate roughly weaknesses.

In some measure, inwards some ways, you're *already* the trader yous desire to be. Once yous realize that, it's exclusively a affair of crystallizing your strengths, turning them into habits, as well as edifice your consistency. Greatness is to a greater extent than than the relative absence of problems; it's the purposeful tillage of one's most distinctive capabilities.

For More On Solution-Focused Change, Check Out:

A Solution-Focused Linkfest

Finding Solutions to Trading Problems

Solution-Focused Self-Coaching

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Info!! The Unmarried Almost Powerful Footstep Toward Becoming Solution Focused Inward Trading

My recent post offered an overview of a solution-focused approach to working on one's trading. Many times, however, traders guide hold difficulty figuring out how to teach started amongst a solution-focused approach. Here's an exercise as well as a uncomplicated framework that tin live on quite useful:

Step One: On i side of a canvass of paper, write downwards all the things y'all most frequently create incorrect every bit a trader--all your worst trading behaviors. It mightiness aid y'all to intend nearly your most hard periods of trading surgical operation inward the yesteryear twelvemonth as well as and hence write downwards all your worst tendencies that contributed to those wretched trading periods.

Step Two: On the other side of the paper, write downwards all your best practices every bit a trader: all the things y'all create best as well as that operate for you. It mightiness aid y'all to intend nearly your most successful periods of trading inward the yesteryear twelvemonth as well as and hence write downwards all your strengths as well as best trading behaviors.

How long is your work list? How long did it guide hold y'all to intend of the entries as well as write them down? How long is your listing of best practices? How long did it guide hold for y'all to come upward up amongst them?

If you're similar many traders, you're to a greater extent than inward conduct on amongst your work behaviors than your best practices. Indeed, many traders are stumped when asked to clearly position their strengths.

If it is much harder for y'all to position best practices than to position work patterns, as well as hence y'all know that y'all are problem-focused, non solution-focused. If y'all were a mouse, you'd exclusively run across the holes inward the Swiss cheese as well as you'd never teach a bite. It's our cheese, non our holes that nourish us every bit traders.

The unmarried affair y'all tin create to induce a solution focus is to position best practices subsequently each of your successful trading days. These best practices may live on grouped yesteryear category, such as:

Best Practices for Generating Trading Ideas
Best Practices for Executing Trade Ideas
Best Practices for Risk Management
Best Practices for Managing Positions
Best Practices for Exiting Positions, etc.

The primal is to remain on the lookout adult man for what industrial plant for you. Every successful trading twenty-four hours should contribute to your best practices catalog. Once y'all generate a listing of best practices, each of these becomes an ideal for y'all to alive upward to. Indeed, every best do tin exceed away a concrete trading finish that keeps y'all grounded inward your strengths. After all, y'all can't alive upward to your best if you're non aware of what y'all create well.

Best practices exceed away goals; goals exceed away routines: The keen private turns excellence into habit. This is primal to successful self-coaching.

More Solution-Focused Resources:

Building Self-Efficacy With a Solution Focus

My Book Chapter on Solution-Focused Brief Therapy (p. 85 ff)

Here is the Book Chapter every bit a Post

How Traders Can Become Their Own Therapists

Overcoming Market Panic

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Info!! Trading Together With Marketplace Psychology: The Best Of 2008 - Book One

I've completed the listing of the best of the posts from the showtime quarter of 2008. I've besides archived links for the best of 2007 as well as 2006. More to come!

The Limits of Self-Esteem

Embracing Your Mistakes

Emotional IQ as well as Trading - Part One; Part Two; Part Three

NYSE as well as the Intraday Trend

Do Daytraders Make Money?

How Common is Elite Talent Among Daytraders?

Most Common Reason Traders Lose Money

Trading's Cardinal Virtue

What Accounts for Trading Expertise

Ideas for a Trading Curriculum

2007 Performance Posts - Volume 1, Volume 2, Volume 3, Volume 4

Happiness as well as Success

The Importance of Leadership

Traders' Greatest Mistake

Examining the Distribution of Your Returns

Understanding Anxiety inwards Trading

Controlling Anxiety With Risk Management

Trade What You See?

Trading as well as Depression

Prop Firms as well as Training

Finding Themes inwards the Market

How Much Coaching is Enough?

Using Trading Journals to Improve Performance

Using Journals to Change Your Patterns

Formatting Your Trading Journal

Coaching: Promises as well as Limits

Trading as well as Denial

Risk Control as well as the Brain

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Info!! Sector Update For January 10Th

Last week's sector review flora bear witness of a clear upside breakout with the viii S&P 500 sectors that I follow as well as the handbasket of xl stocks drawn evenly from those sectors. H5N1 precipitous reversal this week, however, has returned us below the quondam resistance expanse inward the depression 900s as well as dorsum into the prior trading range. This reversal is reflected across the sectors, every bit measured yesteryear the Technical Strength mensurate that quantifies trending:

MATERIALS: -200 (52%)
INDUSTRIAL: -60 (68%)
CONSUMER DISCRETIONARY: -80 (65%)
CONSUMER STAPLES: -60 (43%)
ENERGY: -120 (68%)
HEALTH CARE: +120 (59%)
FINANCIAL: -360 (33%)
TECHNOLOGY: -100 (70%)

Financial stocks clearly lag the group, with commodity-related weakness taking a cost on materials as well as release energy shares. Overall, the pic is no longer i of trending; for the nearly part, we've returned to a make saltation mode. Following the day-to-day tendency ratings for the handbasket of stocks posted earlier each marketplace opened upward via Twitter (free subscription) has been real helpful inward catching the unfolding weakness.

When nosotros expression at the proportion of stocks inward each sector trading inward a higher house their 20-day moving averages every bit reported yesteryear Decision Point (in parentheses), nosotros every bit good encounter deterioration inward momentum relative to final week. Once again, it is clear that fiscal stocks are the weakest sector, significantly underperforming the other groups.

Not reflected inward the sector information is the fact that pocket-size cap stocks bring gone from a seat of leading large caps to i of lagging. Among S&P 500 stocks overall, 58% of issues are trading inward a higher house their 20-day moving averages every bit of Friday's close. Only 41% of S&P 600 pocket-size caps, however, are trading inward a higher house their benchmarks. What this suggests is that, spell weakness has been concentrated inward fiscal as well as commodity-related shares, it has every bit good affected the broader market. This is non the sort of activity i expects next a bullish upside breakout, as well as it volition bring me next the indicator information closely this coming week.
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Info!! Coin Catamenia As Well As Economical Perspectives

Technical Strength with the sectors. As always, I volition hold out updating coin period of time numbers prior to each marketplace position opened upwards via Twitter (free subscription).

While on the topic of online WSJ, hither are roughly links to valuable economical perspectives:

Overview of Fed actions

Calendar of Coming Economic Reports

Excellent Overview of Economic Data
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Info!! Stock Marketplace Trends Are Nonetheless Non Quite Your Friends

I decided to accept a fresh await at an former marketplace position designing together with run into how the S&P 500 Index (SPY) has behaved since the showtime of 2007 nether 2 conditions:

* When it is upwards both on a one-day together with a five-day basis

* When it is downwards both on a one-day together with a five-day basis

When the marketplace position has been upwards yesterday together with over the past times calendar week (N = 163 trading days), the side past times side 5 days inwards SPY conduct maintain averaged a loss of -.97% (66 up, 97 down).

Conversely, when the marketplace position has been downwards yesterday together with downwards over the past times calendar week (N = 155), the side past times side 5 days inwards SPY conduct maintain averaged a arrive at of .20% (86 up, 69 down).

What seems to endure happening is that markets that are upwards or downwards most late together with over the terminal few days conduct maintain short-term together with swing traders leaning the incorrect way. When they unwind their bets to protect their capital, they contribute to countertrend moves.

In the past, I've written nearly how to lose coin inwards the stock market, including how to lose past times buying into uptrends. Those lessons look relevant inwards the electrical flow environment: it's when stocks await evidently potent or weak that markets are most likely to confound human nature together with nosotros are most probable to run into countertrend behavior.
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Info!! Indicator Update For January 12Th

Sectors moved from a dominant uptrend to a generally non-trending mode as well as money flows pulled back, though they stayed good off their demeanour lows.

We went from a really overbought status inward the Cumulative Demand/Supply Index (top chart) to a moderately overbought one; to maintain the bull intact, nosotros desire to run across successively higher cost lows on Cumulative DSI pullbacks. In a skillful bull market, those pullbacks correspond intermediate-term buying opportunities. Similarly, 20-day highs vs. lows pulled dorsum over the by calendar week (middle chart), but novel highs expire on to outnumber novel lows, suggesting that nosotros accept non thence far killed off the bull. The Cumulative Adjusted NYSE TICK (bottom chart) has exclusively modestly retraced its company gains from the terminal calendar week of 2008 as well as the outset purpose of 2009, i time to a greater extent than suggesting that this, then far, is to a greater extent than of a correction of the bull motion than a resumption of the demeanour market.

To sustain the bull market, nosotros postulate to run across novel 20-day highs expire on to outnumber 20-day lows as well as nosotros postulate to run across a resumption of push clitoris amid sectors, coin flow, as well as NYSE TICK. Influenza A virus subtype H5N1 motion below the 850 portion inward the S&P 500 futures would correspond a violation of of import back upward as well as would intermission the designing of higher lows on marketplace position pullbacks. Influenza A virus subtype H5N1 motion dorsum toward novel highs that expands the publish of stocks making fresh novel highs as well as brings the Cumulative TICK as well as coin catamenia to novel highs would live on really supportive of the bull thesis.

As always, I volition update indicators each forenoon earlier the marketplace position opened upward via Twitter. The terminal v "tweets" seem on the spider web log page nether "Twitter Trader"; the total listing tin flame live on institute on my Twitter page, where readers tin flame every bit good sign upward for a gratis subscription via RSS.
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Info!! Intermarket Relationships: Thinking Inward Themes

Consider how the markets traded today:

* Treasury prices were up; yields were lower

* Stocks continued their fall into the trading make of belatedly 2008

* Commodity prices fell; most notably oil

* Consumer discretionary shares underperformed consumer staples stocks

* Financial as well as housing stocks underperformed the wide market

Broadly speaking, markets tin merchandise inwards risk-seeking or risk-shunning ways. How traders process Treasury debt relative to equities; how traders process riskier sectors of stocks relative to to a greater extent than defensive ones; how traders anticipate economical increment or weakness inwards their pricing of commodities: all of these reverberate themes inwards markets that enjoin yous a smashing bargain close the mood as well as persuasion of large marketplace participants.

Catching those themes early on inwards the trading session is quite helpful for short-term traders. Many ideas tin last formulated but past times gauging how riskier assets are trading relative to safer ones.
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Info!! Self-Efficacy Together With The Effective Coaching Of Traders

One of my observations over the years is that the coaching of traders is virtually effective when it is goal-focused. H5N1 large trunk of research suggests that goal-setting facilitates improvements inwards functioning yesteryear channeling as well as energizing efforts. As I noted inwards a recent post, "Effective goals must travel of import to the performer as well as must inspire commitment. While absolute outcome goals tin travel inspiring (such every bit setting a P/L destination for the year), to a greater extent than immediate procedure goals that pertain to day-to-day trading are virtually probable to generate feedback, review, as well as learning."

The role of goals inwards facilitating enhanced functioning is consistent alongside the solution-focus outlined inwards recent posts. In solution-focused coaching, the thought is to position as well as construct upon strengths--including strengths that mightiness travel overlooked. No 1 is wholly dysfunctional; nosotros create non autumn into occupation patterns all the time. Observing what we're doing when problems are *not* occurring ofttimes leads to solutions that reverberate hidden strengths.

Coaching--including the self-coaching of traders as well as portfolio managers--is effective to the marker that it provides experiences of self-efficacy. In other words, whether a trader industrial plant on destination H5N1 or destination B may travel less of import than how he or she industrial plant on those goals. When a trader non alone sets a destination only directs efforts toward reaching the destination over time, the termination is an sense of oneself every bit efficacious. This sense enhances motivation as well as confidence, aiding hereafter risk-taking as well as helping sustain the "flow" the world of consciousness (the "zone") inwards which optimal functioning tin occur.

This is where the human relationship betwixt jitney as well as trader becomes all-important. The coaching is virtually probable to travel successful when the human relationship affirms trader strengths, mirroring competencies as well as helping to sustain efforts at improvement. Such an emphasis is peculiarly helpful to traders who are struggling alongside functioning pressures, every bit the destination focus as well as the affirmative human relationship assist to sustain confidence as well as motivation during hard times.

My full general sense is that traders tend to gear upwardly goals, only tend to travel lax inwards structuring their piece of work on those goals. How nosotros pursue self-improvement is every fleck every bit of import every bit the ends nosotros seek. We are virtually probable to internalize a positive sense of self--a sustained aeroplane of confidence as well as conviction--if nosotros are generating experiences of efficacy on a daily as well as weekly basis.
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Info!! The Ability Of A Unmarried Premise

Consider what your trading evolution would last similar if you lot accepted the uncomplicated premise that, inwards roughly mensurate as well as on roughly occasions, you lot are already the trader you lot want to become.

What if, at times, you lot already recognize marketplace patterns, generate corporation trading ideas, as well as grapple run a endangerment well? What if you lot don't necessitate to operate on your trading problems at all and, instead, exactly necessitate to harness the influences that enable you lot to merchandise well?

What if everything you lot necessitate to succeed is already purpose of who you lot are as well as what you lot do? What if the exclusively alter you lot require is to move past times away to a greater extent than consistent amongst your strengths as well as competencies?

Would you lot even then attempt out advice from gurus? Would you lot even then hold back for answers inwards the latest indicators as well as systems? Or would you lot devote yourself to becoming the best you lot tin be--enacting the best inside you--confident that the answers you lot attempt guide maintain been purpose of you lot all along?

More posts for self-coaching are archived on the novel site.

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Info!! Trading Together With Marketplace Psychology: The Best Of 2008 - Book Two

Below are the standout posts from the minute quarter of 2008; the starting fourth dimension quarter's posts can hold upwards constitute here. Here are archives for the best of 2007 together with the best of 2006.

Changing Negative Thought Patterns

Breaking Patterns of Frustrated Trading

A Technique for Preventing Frustration

Trading Psychology Observations

When Traders Press Too Hard to Win

The Importance of Keeping Score

Trading Like a Sniper

Achieving Greatness every bit a Trader

Key Ideas From Trading Psychology

Signs of a Range Bound Market

Conquering Trading Demons

Market Volatility together with Psychology

How Trading Dreams Come True

Making Changes to Your Trading

Changing Our Viewing together with Doing

Psychological Change together with Discrepancy

Changing Minds together with Changing Markets

The Trader every bit Business Manager

Getting Off the Performance Roller Coaster

Knowing When to Stop

Solution Patterns for Traders

Trading together with Intuition

The Psychology of Risk together with Return

The Fear of Missing Out on Trades

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Info!! Viking Metal, Designing Studies, In Addition To Marketplace Weakness

Back later a few days on the route working amongst traders. Thanks to Taylor of the designing study from Ripe Trade. Nice telephone telephone re: weak bounces from Quantifiable Edges. We're seeing approximately fantabulous studies from bloggers; I'll live on making certain to greenback these inward my the post service on marketplace position themes. These intermarket relationships convey been especially helpful inward keeping traders on the correct side of the marketplace position activity lately. Weak fiscal shares, potent Treasuries, in addition to weak commodities check into a subject that speaks of both economical weakness in addition to trader/investor sentiment.

Note, however, the continued rally amid municipal bonds, especially high quality, intermediate-term. The search for yield continues, fifty-fifty amidst the gamble aversion inward equities. The agency the gamble aversion persuasion is probable to play out is relative outperformance of higher character credit vs. junk. As yields on the shorter-term, expert character materials come upward in, it volition live on interesting to encounter which impulse wins out amid investors: the postulate for yield vs. the postulate for safety.

Has to live on the best merchandise thought that simply won't pay out: buying aureate vs. USD. Zero involvement rates in addition to economical weakness notwithstanding, inward a gamble aversion mode, USD benefits. Even the best cardinal ideas simply can't move traction if the trader/investor persuasion isn't there.
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Info!! Observing Marketplace Grade Visit Through The Lens Of Credit Markets

catching marketplace position themes that reverberate the consider of dominant marketplace position players. The fixed income markets offering a overnice consider of investor flying to security (Treasury bond toll strength) vs. willingness to assume opportunity inwards search of yield. Recent activity suggests that, inwards the confront of dubiousness inwards the fiscal system, investors volition vantage safer sources of yield relative to riskier ones. Observing how these segments of the credit markets are trading during the twenty-four hr menstruum provides a worthwhile consider on trends in addition to turnarounds inwards investor sentiment.
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Info!! To A Greater Extent Than Bear Witness Of Lumpiness Inwards Housing Inventory

distribution of housing inventory across the United States of America together with flora non bad disparities. Some regions of the Earth present footling oversupply; others are completely glutted. This lumpiness of the information makes the housing crisis to a greater extent than hard than aggregate numbers mightiness suggest. It is non clear that lowering of mortgage rates, aiding choose homeowners inwards avoiding foreclosure, together with like measures volition endure sufficient to create the postulate for years worth of housing inventory inwards overbuilt marketplace segments (resort areas, beach condos) when consumers are pulling dorsum from fifty-fifty little retail purchases.

Indeed, at that spot is merely about indication that a minute moving ridge of selling, every bit a "shadow inventory" of homes comes to market.

Someone lately told me that my ain local housing marketplace inwards Naperville, IL is inwards relatively proficient shape because at that spot is exclusively virtually 1 twelvemonth of inventory for sale based on 2008 sales figures. If, however, nosotros intermission downwards the inventory past times cost (see nautical chart above), nosotros 1 time to a greater extent than consider prove of lumpiness. There is footling inventory work at the lower cease of the housing spectrum; speculation inwards that marketplace had centered on the luxury end, where at that spot is to a greater extent than than three years of inventory. At twelvemonth cease 2008, annual sales of homes inwards a higher identify $1,200,000 inwards Naperville were 36, but 114 homes were on the market. Stated otherwise, virtually 3% of housing sales inwards that marketplace convey been inwards a higher identify $1,200,000, but 15% of the inventory is priced at that level.

In my looks at other suburban communities, from Washington to Florida, I convey seen like lumpiness inwards inventory. The high-ends of the market, which was where the coin was, generated the greatest overbuilding. In an environs inwards which aging infant boomers are downsizing, consumers are retrenching, together with abode values are falling, it is non at all clear that at that spot is the postulate to come across such supply, leaving builders together with local banks at serious risk.
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