Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
How do you become a better trader? Probably for most of us, it can be as simple as looking at our prior trades in retrospect to see if they made sense?
I had a reader e-mail a little while ago and asked about a short trade he tried in the SPY which he covered for a small loss, to see what I thought about the trade … he already knew the answer in retrospect by looking at the trade. He was caught up in the small time frame chart (1-minute) and didn't realize he was swimming against the current.
In my site's Elliott Wave Theory lesson module I talk about how most day traders never make money and that the biggest reason is as simple as they often trade counter-trend. The sad thing is that almost all of these traders don't even realize that they are trading against the bigger trend.
That is why I am always looking at where we are in terms of the wave structure on multiple time frames … I want to avoid the simple mistake of getting long at the top of a wave structure (or short at the bottom of one), and I definitely want to know what the direction of the bigger trends are. That is what my Morning Outlook and Afternoon Trading Plan try to do … assess where the market is going and then trade based on that bigger directional bias.
We're finally seeing some weakness out of this market as we have pulled nicely off of the day's highs and into the red. But the constant theme of this market so far in 2012 is the seemingly endless bid underneath this market. We haven't seen it kick in yet today, but one can't discount that still happening. We also have a lot of potential news catalysts in the form of the FOMC Statement on Wednesday as well as the GDP report on Friday.
With that said, take a look at the setups below. You have 2 1/2 longs and 1 1/2 shorts (you'll see what I mean). All of them provide tight stop-losses to prevent any major damage should the market go against you, while offering quite a bit of reward should the market confirm your market predisposition.
A correlation between stock market performance and geomagnetism is captured in a paper here by Krivelyova and Robotti. That aside, it is a rarely used discipline in trading, and if you search Marketwatch, Bloomberg and CNBC for its reference, you will come away empty handed. My latest findings are about to demonstrate its importance.
Here is daily geomagnetism versus the S&P500 stock index since the cyclical bull market begain in March 2009. The red-yellow spikes down are high geomagnetic disturbances, and the two periods in which they are strongest correspond to correction periods in the stock market. In between and either side, stocks advance during periods of relatively benign geomagnetism.
European Confidence data released today shows that consumer confidence remains depressed at 2008/09 levels, well below zero, as shown on the graph below. This low level of consumer spending is fact in spite of the rosy picture that markets are attempting to paint and is well below the average recorded for the past nine years.