Thursday, November 6, 2014

Where's the trades, Dude?

The problem with writing each day about trading is that I'm at the mercy of the market. Some weeks are filled with Sturm und Drang and are totally fascinating. Others? Can we all spell b-o-r-i-n-g?

When the boring stretches come, during the long hours between the opening bell and the closing, I start to hear voices, murmuring, "OK, Private Trader. Where are the trades?"

As always, the chart tells the story. The chart below, in the candlestick format, tracks the S&P 500 for the past 11 trading days. I've marked my signal points, the 20-day price channel for entry in blue and the 10-day price channel for exit in purple under my shorter-term trading rules.

Click on chart to enlarge.
S&P 500, 11 days daily bars

While the price has been moving up, setting a new higher high every few days, it really isn't moving up by a lot, and in fact is pretty much going nowhere, especially in the last five days. 

The trading punditocracy mutters darkly about the market topping if they are pessimists, and resumption of the never-ending uptrend if they are optimists.

Myself, I don't interpret. I only play the signals as they come under my rules. Once the market resumes a strong trend, and once earnings season is over -- it's already tapering off -- then I'll have some trades.

Especially if the market moves into a downtrend, eliminating all the bull signals I've been getting on "hooks" -- a rise that has yet to break above recent upside resistance.

In the meanwhile, I shall stand by my strong opinion that knowing when not to trade is as important as knowing when to.

-- Tim Bovee, Portland, Oregon, Nov. 6, 2014


My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My very short term volatility trading rules can be read here

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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