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Monday, May 17, 2010

Traders paradise

There are times in the market when nothing goes right for a trader and then there are days like last few days where this has been a traders paradise.  Daily one gets one or two chances to put in good trades.  Most advisers will counsel to stay away when the volatility is high in markets I always believed while the risks are more so is potential for profits.  Going into the markets this morning I was quite bearish.  Add to that the overnight negative 120 on the DOW  I was thinking we could have a disastrous day on our hand.  BUT the market does what it always does and opened flat and quickly established the highs of the day in 10 minutes.  I went short at 28.45 on the FAS primarily because of the DKOD from Friday.  Slowly but surely we got a confirmation from the DMRM and inched rapidly to make a low at 26.08.  I jumped out at 26.37.  Because there was good money to be taken out. Signal to go long came at 26.91 late in the day at 11.40 and I got in at 26.85 because I was anticipating a green stick  and jumped out 27.85 again not wanting to take any positions home.  The graph is that of FAS 15 minutes with DOMA 77.  Island is still stranded. FAS did not get the average decline of 22%  to get to 23.  That is still a negative.   FAS has not crossed the DOMA that is also a negative.  The drawn resistance line has not been broken that is also negative. High probability that Tuesday and Monday are opposites. that is a negative. SPX did give its DMRM at 1136.4 that is positive.
I sit in front of the computer all day watch the screen and as situation arises I go in.  Mostly with one of my tested observations.  (1) DKOD from the previous day gives a good idea about overall next day (2) DMRM gives in and out signals. (3) DOMA gives timing of entry (4) envelopes gives what if I am wrong limits.  and others in order of priority are Gann lines ,several trend lines ,EW counts and a few channels and  Special situation like FED rate policy days and Highs and Lows compared to previous day and including Outside days and Inside days. I haven't traded using stats like RSI, Macd , stochastic and Aroon I do look at them from time to time.  One of my favorite blogs to read is from my buddy Columbia1 at http://ewtrendsandcharts.blogspot.com/.  His analysis is high class.  
I am still bearish just a tad bit less. 

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