Wheelhouse View of the Market

If you take a look at the Dow 30, Nasdaq Composite, and the Vix, they all look to be forming a range or channel working towards the 50 day sma. The bearish flag on the Dow/SP/Wilshire/NYSE are essentially ranges with today's rally off the bottom of the flag. Nasdaq looks less bearish but is still below the 50 sma. The market is looking more like it needs some range bound action...accumulation...before getting into bull market territory again.

Day trading remains the name of the game for now. RIMM was my only day trade today, went 113% on margin and took a quick 40 cents in a 30 minute trade. Made 1.4% on the account...took me more time than that to eat my lunch afterward. I'll take it...one more brick. Good luck rest of the week.

One for the Aces

A member from Tumblertrades.com emailed me asking how I have melded swing trading and "The T" ( Tumbler's day trading method). Hoping to explain that a little here...

The book Hedge Fund Edge explains a little how to use multiple time frames in your trading. HFE talks about taking a trade to the next time horizon. How is that done? For me, in a nutshell this means that I enter on an intraday chart for a day trade, but the daily helps me decide how long I can stay.

I am not saying the exit rules of the T are not applied to the trade, because they are. However, the daily chart (maybe hourly for some works better) can tell me many things about my day trade (list is not all inclusive):

1. Whether to take one good day trade setup over another, assuming all else equal (i.e. catalyst and reward/risk same and both good setup for T).

2. Whether to hold thru intraday pullbacks above the 4/15 or 8/15 or sell at first exit chance (i.e. red frame up the line).

3. Whether to hold a day trade overnight or exit by close. Especially in the current market, this usually means selling a strength frame the next morning. Guess who is buying those shares from us? Many folks that ran a scan the night before and see the stock had a breakout on their daily charts, they buy the morning, from us.

As you can see I did not invent anything I just used the T to compliment and improve my existing trading methods. I do not trade exactly like him, I trade a lot less frequently. And this is still new to my trading, so it is not perfected yet. Tumbler emailed my trades to the Aces last month DECK PEET and LNKD. You can see especially with DECK and PEET how the daily chart can tell me whether to see if there is more. Both were eps catalysts in hot sector also.

Look at examples today - AMZN, PANL, GMCR all good day trades avalable, daily chart bouncing off the 50 day on big green candles. Market bouncing from oversold intraday. Do you sell the close today or see if there is more tomorrow? Your call :)))

Good luck to all of you and study those chart chats...they are an underrated learning tool in my book.