DELL news was released after hours ( when the market closed on Thursday ) so this new info is not yet into Fridays price.. intra day trading of futures/stocks/SB or what ever instrument you trade only looks into that particular day and not from few days back ,,
I think it was on Wednesday ,, just up until WARREN BUFFET,s comment the futures were down by 70 points and i was thinking of shorting the market for the day,, Mr Buffet suddenly admitted that he has bought into AMERICAN EXPESS and all of the sudden the market spiked up and it was one of the strongest days and it closed 200 point up. Now, lets go to DOW2008 prediction thread on the main BB,, Did our young traders know about Mr. buffet's next day comment ? NO, NO BODY KNEW ,Our traders analysis became invalid by new information which arrived on Wednesday morning which was not in Tuesdays' chart .Our traders INSTEAD OF GETTING TO THE BOTTOM OF TRUTH AND FINDING WHY FUTURES TURNED AROUND AND SPIKED UP ON WEDNESDAY THEY WENT BACK TO THEIR TUESDAY'S CHART TO FIND A TECHNICAL ANSWER AND BOY THERE ARE MILLIONS OF STUPID TECHNICAL REASONS TO JUSTIFY THEIR FAILURE.
I repeat , i am not in any way against TA.. far from it but the fact remains that using TA alone does not do the trick and IMHO there is not a single PURE Technician who is rewarded for his knowledge of classical TA in the market . I say this categorically and if i had said this on the main BB some one would have come along to prove me wrong with false financial claims to underestimate my view. Most these defenders of TA are new to this game and they argue for various reasons and not because they can show their P/L.
Before any trading days do the following ..
1) look at the futures .. is it up or down ? if up why up and if down why down ..
2) How much futures are up if 100 then why up so much,, CNBC,, tells you why market is up or down
3) listen to ASH.. he is on CNBC and is the NYSE floor director,, his views counts a lot
4) IF DOW IS UP look for NASDAQ.. IS NASDAQ UP too if not then the market either oscillates of runs up fast and sells off in the afternoon ,,
5) find out why NADSAQ is down or is lagging
6) for a strong trending day you need SP500,NASDAQ and DOW all confirming . Any disconfirmation shall result in huge volatility and market oscillates ,, Hence a very difficult day . Most traders lose during oscillation ,, the reason is EXCESS RISK during oscillation and traders who do not understand pos and risk management they lose most.
7) DONOT YOU EVER EVER LET COUPLE OF HIGH OR LOW VOLUME BARS TO TELL YOU IF MARKET IS STRONG OR WEAK ,, Classical TA tells you a high VOULME bar is very bearish or bullish depending o the direction of the bar .. .. DONOT BE FOOLED,, I can prove to you in real time that classical HIGH VOULME ANALYSIS OF BARS means nothing any more . The high volume bars often occur @ open so be carful and don't read too much into this.
8) instead of learning more TA learn more pos management
9) Look at the FINVIZ,, Look for leaders in a sector are they in red or green..
10 ) Watch CNBC pre market,, if a bad news hit the market and market went down and it recovered then it is going to be a STRONG DAY ,, ISM ,PPI and news like that tells you a lot about DAY'S trend,, resistance to bad news is bullish for the rest of the day ,,
10 ) Finally try to do more FA analysis than TA as explained above ( Pre market )
Grey1
