process trumps results all the time

  • NASDAQ Composite’s closing day’s price is the most important price.
  • Market index itself will tell us the conditions of market.
  • Trend reversals or transition points is where maximum ROI is made.

I have heard that from FT 71 

Futures Trader 71 aka Morad Aksar. He is a well established day trader but i am not a day trader but i have learnt some tit bits from him.

Another important truism/maxim i have learnt in theory and practice is this : Preserve your capital at all costs. In theory i have learned it at Options Express 2 day courses with George Fontanills. Practically after losing much of my profits i learnt to add this : Preserve your profits at all costs too!

why? When we transition – right at transition times is when we hit Gold mine.

Let me explain : Now you see the NASDAQ daily chart. On December 24th 2019 we hit 6190 and 50 days Simple Moving average was 7164.  The difference of around 1000 points.

Since we know at this blog that the price is the only true North Star and we would have been in short position for this long. We expect the price to continue trending down till it does not.

Now next day we have December 26th, and we also know that the closing price is very very important and significant. All the billions and billions of dollars and savvy money managers and hedge fund gurus and Mutual funds all fight it out and finally come to the days end and a closing price. The most significant price for the day. December 26th it closed up around 361 points.

Has the trend reversed? We don’t know, but the wonderful big green candle catches our attentions since we are attended the heart beat of the market which is nothing but the index like NASDAQ Composite.

that is the first day of attempted rally. why ? the closing price was higher than the previous days closing price and by a whopper!

we wait and see and by Jan 4th after 7 trading days it is alright up by around 525 points from the low of the first day of attempted rally. It was day 7th follow through day of the attempted rally

System developed by William J. O’Neil to identify an important change in general market direction from a definite downtrend to a new uptrend.

A follow-through day occurs during a market correction when a major index closes significantly higher than the previous day, and in greater volume. It happens Day 4 or later of an attempted rally. Leading up to a follow-through day, an attempted rally takes place during a downtrend when a major index closes with a gain. The rally attempt continues intact as long as the index doesn’t make a new low.

Follow-through day variables include: an index closing sufficiently above 1% on increased volume, positive behavior of leading stocks, and improved market action regarding support vs. resistance levels. The most powerful follow-through days often happen Day 4 through Day 7 of an attempted rally.

In the wake of a follow-through day, the market should continue to add gains in strong volume, with breakouts by top stocks. This is further confirmation a new uptrend is underway.

Now we enter the market always always with a stop and right now the market is up 750 points from the entry.

happy trading!

 

 

 

Great rally so far but OBV not convincing on NASDAQ

according to IBD – “The Nasdaq composite ended with a gain of 1.5%. But the blemish to the gain was that the index met with some selling pressure as it approached the 7500 level. The index’s 200-day moving average currently sits around 7520. The Nasdaq closed in the upper half of Monday’s range, but it ended just below the 50-day moving average.”

The On Balance Volume (OBV) on QLD is not convincing – it is just above the levels on Nov 9th 2018 which is 59.337 Million as opposed to yesterday which was 59.786 million. no divergence (this divergence was exactly seen on Nov 7th 2018 at 62.335 million which was much below at similar QLD price levels on 10/22 when then OBV was 67.719 million)

then the market fell from 7500 Levels on Nov 7th to 6900 levels on Nov 20th – a drop off 600 points because of volume pumping up the price was not intense. OBV would indicate that very clearly.

according to IBD – “The Dow Jones and S&P 500 each added 1.1%, closing bullishly above their 50-day moving averages. Preliminary data showed volume on the NYSE coming in about 10% lower than Friday’s total. Nasdaq turnover was close to Friday’s.”

but for NASDAQ the cortical level of 7500 is not crossed.

Market is in rally but preserve capital and profits

Lessons learnt in market crash – Part 2

Hello travel traders

Good morning from Hyderabad India. Nov 6th is a big day for the USA. it is sunny at about 10:00 am here.

Part 1 can be found here

Screen Shot 2018-11-06 at 9.44.21 AM

FFTY is the growth stocks ETF. It is passively managed fund and tracks the IBD 50 – The best growth stocks in the market. the holdings are updated weekly

you see, Growth stocks break down about 2 – 2 1/2 times that of market. as the market is falling they hold up well for 3-4 days and are resilient. But they start collapsing the faster as the bear market sets in. Why? because market drops 4 times faster then it goes up – because markets climb the wall of worry and fall of the cliff.

Look at the bearish engulfing candle stick pattern at the  tops – a solid red candle after a small green one.

Along with $S5FI this is a reliable portent.

For market  bottoms Growth stocks are first to break out after a follow through day.

Follow-through signals are more likely to fail if distribution days occur in the first few days of a new uptrend. This is one key red flag. A distribution day, which points to institutional selling, involves a drop of 0.2% or more in the Nasdaq or the S&P 500 in higher volume.

Generally, a distribution day within a few days of a follow-through leads to a failed rally. The risk drops off sharply after the fifth day.

A second red flag? In the early stages of a new uptrend, strong action among leading stocks is crucial. Top-rated stocks should be breaking out of bases in big volume. This is a clear sign that professional investors are stepping back in to buy stocks.

have a wonderful day and please vote!

 

What a upswing yesterday!

Wednesday, September 12th 2018, around 8:30 am Hyderabad, India; and around 11:00 pm Wednesday, September 12th 2018 New York Time

futures before opening did not look nice…NDX opened lower about 40 points! but immediately started going up and up 100+ points at close. That is a good upswing!

NDX solid support and bounce above 9 Week EMA. FFTY – top 50 growth stocks in the market good bounce above 9 Day EMA!.

Accumulation distribution line for NYSE – not as good as yesterday, but 1430 stocks up (majority of stocks) in good volume of 1.56 billion (better volume than yesterday)

most spectacular advance was NDX – low of 7401 and closed around 7507!

only red flag was the breath – IBD calls it ‘curiously soft’ ! Decliners led advancers by 15-to-13 in NASDAQ. Well there is one other red flag – % of S&P 500 stocks above their 50 day SMA declined by not that much to 64.55

One another thing – Apple, Amazon, Microsoft, and Google is 26 % of NASDAQ! Now these stocks are institutional darlings and heavy weight!. How are the institutions treating them ? Screen Shot 2018-09-12 at 8.45.50 AM

decision : I’m staying in QLD

and i am long on NQ 1 Contract

Happy trading

apple strikes again – up by around 5%

apple strikes again august 2nd 2017

By 1 pm today – the NASDAQ dropped about 31 points (the futures were up 45 points at one time last night). That shows to us a critical point that i have observed over many months now: stocks don’t always follow the futures.

Apple earned $1.67 a share, (up 18% YOY); sales : $45.4 billion (up 7% 3 months) That was well above what analysts expected Apple to earn and for sales ($1.57 a share on sales of $44.89 billion).

Volume was lower on the NYSE compared with the same time Noon EST, but higher on the Nasdaq, (The most intense trading in Apple shares — running about 5 times greater than the 50 days moving average of volume. Losing stocks led winners by 12-to-7 on the NYSE and by about 13-to-5 on the Nasdaq.

Solar energy stocks, the No. 1 industry group out of the 197 that IBD tracks, was Wednesday’s worst-performing