Sunday, October 25, 2009

Thirsting for Information

Spending some time away from computers and charts for a day and a half had me thinking a lot about how we, as traders, often over-complicate things to the point we are left motionless to take a trade, or even worse... act on the fear of not being in a trade. How do I know this? Because I'm guilty of it all the time. Sometimes I not only want fairly good risk/reward on my side, I want the perfect trade- and the odds of that happening trade after trade are pretty slim.

This picture of a glass of water is a good example: if I decide to think too much about it, I might decide it's not really a glass of water, but a glass of Stoli, bleach, or 7-up that's gone flat. But on first glance, it's just a glass of water on the first pass with my eyes. My protective instincts will cause me to explore it by taste or scent before I indulge in it, but if I really wanted to get crazy, I might also want to know the mineral content of the water, and about a thousand other things. Meanwhile, I'm thirsty! So why not just drink the darned glass of water and move on? It's the same way with trading sometimes: the human mind tends to believe that if something is too simple, it cannot work. So... we complicate things, and possibly find ourselves unable to get with the rhythym of our own trading set-ups. Just food (or water) for thought going into this week of trading.

In keeping with my own effort to KISS the trading this week, I'm sharing my chart on IWM. Unlike the SPX/INDU/COMPQ, it failed to not only make a new high, it failed to even breach the old highs. That has my attention, as these are riskier based stocks, so amongst all of the other risk indicators out there, this one is pretty darned basic, but surely worth a good watch during the week. It also has some very nice patterns shaping up here, and maybe this will be the thing to foretell where we're going. I'm including both the daily and intra-day chart for your amusement. ;-) I have another data point I'll try to share later on, but still waiting to make sure there are no copyright infringements in that effort. If there is, I'll share a link to data I think you might like to keep an eye on. Also, the video below is a different sort of view of the state of things, and while I don't agree that we're in "post" crisis mode, it's a not so doom and gloom view of the belt tightening behavior of the US consumer, that really isn't a bad thing afterall. I hope all of you TTWinners had a great weekend, and I can't wait to dig in with you all and trade this tape for the next five days! ~Keirsten

IWM: Daily

IWM- Current Intra-day

I'm showing the data from StockCharts that it did close below the TL, but on my own charting platform, it's still a bit above it, but closed EOD below the 50 EMA

About a month ago I found a good chart showing Long-term money flow, so decided to investigate what's been happening in that arena since then, so here's my graph with data from ICI.
Follow the money.

John Gerzema: The post-crisis consumer




2009-10-04_1931 DDT here – just few charts, few coughs, few complains – same old stuff.

Don’t know about you, but I’ll do my best to bring market down next week – 920 would be really sweet as compensation for suffering.





Monday Oct 26th 8AM ETD


Daily Range Projections


Futures approx. BO



Daily Range Projection















Overnight action, if any, was all about hammering the dollar (within reasonable limits) – let see what first hours will bring to the table.  I am leaning to the dark side, but doubt that it will be an easy trade.


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