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  • The Winner Is ... SHUTDOWN 0 comments
    Oct 4, 2013 8:54 AM

    We're into the 4th day of this shutdown with little good news to boot.

    SnP500 provided a high-probability Buy Setup yesterday = at least for the short-term Trend Traders:

    >> SnP500 Short-Term TA: http://g15.picoodle.com/ltd/img15/5/10/3/aarc/f_141u_fbb_ubk5c.png

    This remained a short-term trade based mostly on news coming from the dysfunctional politicians. Thus, trading is like trying to out-maneuver a deadly snake.

    >> SnP500 Daily Chart TA: http://img10.imagefra.me/i5a4/aarc/141u_807_ubk5c.png

    Obviously, SnP500 is still struggling to use the 50ma as a support and it failed to close above the 50ma yesterday. Thus TA Traders are going to be less bullish today than otherwise would have been if it closed above.

    Compq remained bullish on the daily and intraday charts so there is no need to update the intraday chart.

    =============

    Trading Strategies:

    Consistently trading the markets successfully is never easy. A success rate of 3:1 and a profit/loss ratio of 3:1 is the common yardstick for traders.

    So far, the markets provided high-probability Trade Setups for Day-Trades and Swing Trades this year with at least 3 successful Swing Trades and 2 successful Day-Trades published in my Instablog. There were 2 failed Day-Trades last August published in my Comments with one making tiny profits and the other incurred small losses.

    The Day-Trade publish in the last Instablog for YM got stopped out with small profits on one position as YM rallied for a day and small losses on the other 2 positions as it finally went down unable to sustain the one-day rally.

    Right now there is no high-probability Trade Setups. Thus, the above performance may start to suffer considerably if the markets stay highly unpredictable in the weeks and months ahead.

    ---------------

    I bought YM again yesterday as SnP500 made a recovery above the Major Support.

    - One position is designed as a Day-Trade and will be terminated if YM (or SnP500) makes an a-b-c rally in the next week or two. Stop loss is below yesterday's low;

    - The other position is designed as a Swing Trade with 17,000 area the initial target. Stop loss is below 14,821.

    YM (and Dow Jones) are qualified i-ii-iii-iv-v on the daily chart:

    >> YM Daily Chart: http://img10.imagefra.me/i5a4/aarc/141u_69d_ubk5c.png

    Obviously YM is testing the lower Trendline Support with a possible weak C-wave down. But then a failed rally can easily result into an Expanded Flat with 14,339 initial target to the downside.

    Notes:

    I already have preparatory Swing Trade for SSO with the 1800-1900 area the target range = bought near the June 2013 bottom at $76 to $74 range. With the current patterns considered as not high-probability for a Swing Trade; I decided to use YM instead in order to prevent potentially large losses against overnight gap downs that is very hard to prevent when using stocks and ETFs.

    For those who still aspire for further rallies; the Trend is still the Friend. But with no high-probability setups for SnP500 and Dow Jones; be sure to use hard stops in order to prevent potentially massive losses to the downside just-in-case we undergo either a 10% or a 20% correction in the months ahead.

    For trading SnP500 (or SSO/SPY) the Uptrendline is the last-resort support for Trend Traders. SnP500 may or may not go down to that support; thus buying initial positions on a rally today can be considered frugal in order not to be left behind just in case SnP500 goes into a strong rally later.

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