After a few days off from doing the videos we are back with some more unmissable stock market commentary! On the SP- 500, we are now seeing price action that is in a broadening price range whereas before we had been seeing a parallel price range. There are buyers coming in at the bounce points in the new range and we are seeing higher highs and higher lows in the range.
We have been doing some market commentary on the precious metal sector oil and energy sector for some time now and they are bullish in these sectors. We have been absent from the market updates to focus on these sectors and particularly to identify the best possible trading opportunities for our own trading portfolio. When we see sell off's in market conditions like the ones we are having now, we need to identify the key areas to either add to previous positions that have been held or to add new positions in strong sectors with strong stocks in them.
But how do we know which stocks are going to be the big hitters? The answer to this question is we don't! But what we can do to maximise our chance of picking a stock that doubles, triples or even quadruples is to focus on strong market sectors and then drill down to some stocks that have nice clean price action and apply our rules to those particular stocks.
Thanks to all our followers again for all your kind words. We like to mention these great comments every so often just to acknowledge our gratitude in the time you have taken to thank us.
Any questions you have regarding any of the literature on the website please do not hesitate to contact us as we will be only too happy to answer your trading queries.
Stock Market Update Video
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<_yoast_wpseo_metakeywords>Stock Market, Sector analysis, Trade, Stocks, shares, options, forex, strategies,
<_yoast_wpseo_metadesc>Understand when to trade and what sectors to trade when the edge is at it's highest. Sector analysis and stock market analysis are the key to timing your entry's>
<_yoast_wpseo_title>Stock Market Commentary - What Sectors to Trade?
Stock Market Double Dip or Continuation Pattern?triangle chart pattern. This is considered to be a continuation pattern of the overall trend but is that what we are seeing now?To simplify the chart of the SP-500, I have drawn in the levels where we were going long from June 2010 so you can observe the thought process behind the levels of support resistance. In the last part of April we were advising our clients to start tightening up on trailing stop due to the sideward range which indicates volatility and what we call a shorter term phase 3 in an uptrend. In this instance we protected our client's gains and sat on the sidelines to wait for the next higher odds potential trading opportunities.
[caption id="attachment_1504" align="alignright" width="300"] Key Support Resistance Levels[/caption]
June saw a level of support coming in around the February pivot low which added evidence that buyers were also sitting on the sidelines waiting to buy the support. A pattern we have identified in our 10 years of trading is that for every action, there is a reaction. By using this observation you would at least believe that the price action would retest the prior April high at the minimum considering the overall trend is up.
July's bear trap was confusing but we had identified the bounce or rejection at the MA cross over, however the price action did bounce fast which alerted us to a nice trading channel allowing us to buy the support.
July into August saw us use our money management profiling to enter some positions using the channel as entry and exit targets. This works well for us and keeps us sharp in the lower odds trading areas.
In September, we got all our evidence at support of a nice phase 1. The long range bar added further evidence that this was a powerful thrust and that buyers had accumulated in the phase 1 at support. As we considered this to be a trading range we followed our rules at levels of resistance which is to tighten up on our trailing stops. See we let you into a little trading secret there- not taking profit but tightening trailing stops! This kept us in our positions and fulfilled our original analysis that for every action there is a reaction which in this case was a test of the previous high in April.
November - Adapting to the market is what trading is all about whilst knowing that we have just had a two month rally and we have just been trailed out of our positions. We know it's due a correction but at this time there is really no way other than using MA's to identify where the next bunch of buyers are likely to come into the market as we cannot draw any trendlines.
On the 1st December we identified the breakout of the 50MA phase 1 again which was confirmed with a long range break out bar. The trend stayed intact and was contained by the longer term trading channel, depending how you draw it up until it broke it 3 weeks ago when this sell off began in the market. The price action is currently holding up around the 50 MA and reverting back to the question earlier, is this a continuation triangle or a consolidation before we see a double dip?
It's all about the analysis:
Longer term trendline is broken depending where you are drawing it from!
50MA is holding the price action!
150Ma is in an uptrend but slightly extended
Price volatility at this level is high alerting you to a possible trend continuation or trend reversal
Triangle is not confirmed but if it breaks to the upside it's a continuation of trend
Volume on the selloff has been reducing
When analysing the SP-500 its best not to predict what it's going to do but react to what it hands to you. We need to see some further evidence over the next few days of what the market is planning on doing but it has definitely been the right decision to sit and wait. This is because the price action has been very volatile and it's times like these that you can give back all your hard earned profit from your successful trades!
When to Trade Futures and when to Focus on Silver
If you have any questions relating to this market update or wish for us to talk about a trading subject that you're interested in, please don't hesitate to contact us.
Key Support Resistance Levels[/caption]
June saw a level of support coming in around the February pivot low which added evidence that buyers were also sitting on the sidelines waiting to buy the support. A pattern we have identified in our 10 years of trading is that for every action, there is a reaction. By using this observation you would at least believe that the price action would retest the prior April high at the minimum considering the overall trend is up.
July's bear trap was confusing but we had identified the bounce or rejection at the MA cross over, however the price action did bounce fast which alerted us to a nice trading channel allowing us to buy the support.
July into August saw us use our money management profiling to enter some positions using the channel as entry and exit targets. This works well for us and keeps us sharp in the lower odds trading areas.
In September, we got all our evidence at support of a nice phase 1. The long range bar added further evidence that this was a powerful thrust and that buyers had accumulated in the phase 1 at support. As we considered this to be a trading range we followed our rules at levels of resistance which is to tighten up on our trailing stops. See we let you into a little trading secret there- not taking profit but tightening trailing stops! This kept us in our positions and fulfilled our original analysis that for every action there is a reaction which in this case was a test of the previous high in April.
November - Adapting to the market is what trading is all about whilst knowing that we have just had a two month rally and we have just been trailed out of our positions. We know it's due a correction but at this time there is really no way other than using MA's to identify where the next bunch of buyers are likely to come into the market as we cannot draw any trendlines.
On the 1st December we identified the breakout of the 50MA phase 1 again which was confirmed with a long range break out bar. The trend stayed intact and was contained by the longer term trading channel, depending how you draw it up until it broke it 3 weeks ago when this sell off began in the market. The price action is currently holding up around the 50 MA and reverting back to the question earlier, is this a continuation triangle or a consolidation before we see a double dip?
It's all about the analysis: