Don't Get Involved In The Market When He Is Not Acting Well

It's late night and can't get to sleep and wanting to find out or should I say how the market works or how it affects or relates to individual(s). It's just the thought of one of 'those' times that you wonder or give some meaning on your own especially if you've been attached to the market for quite a while and still trying to figure out really how the market 'really...really' works. I made those two words repeatable because when you are involved with the (like you sleep and breath with it) market on a daily basis, it is like a cycle that is always repeating same movement that you can't understand. It is like an insane person or a human being having a Parkinson's disease. And all the participants are trying to understand everything on it and they can't detect nor figure it out how to approach an 'insane' market. Most of all will conclude 'that's how the market is', if the market is not that 'insane', there is no market at all, as some will/would chorused. I might agree with that statement that the market is that 'that' insane, because you cannot really 'understand' the market and will never be. The market is a continuing unpredictable 'animal', that will haunt each and every participants because of its notorious or treacherous moves. I am talking here about in the trader's perspective not through investors insights. Trading the market is such a very delicate endeavor especially if you are not that prepared, and if you are treating trading as a ticket to a cash machine. That's a wrong impression. There are many reasons why we traders fail to understand... is that we cannot just trade and get involved in the market all the time. Especially if he is really...really that crazy, or else we will end up one.

Shutdown 'Short' Trade Setup

As the government shuts down, the market went shut down too. And the best way is to capitalized on it. And this 5-min chart from Gold was a no-brainer 'short' trade. Just press the sell button (upper arrow) and press the buy (cover) button (lower arrow), and on your way for a nice profitable trade. That's why watching and observing the market movement is the best way to participate and gain from it. Patience pays off and it's a virtue!

Now Facebook (FB) is Souring

Shown is the weekly chart of the social lovers, the Facebook, known better in the socials as FB. From its IPO in May of 2012 at a price of $42?, its drops to a mere $18 after five months. And from then, and after almost a year of consolidation, it formed a 'cup with a handle' (a Wall Street lingo, that means a bullish trend is in the offing), though the handle was a little bit extended. Looking at it right now it is souring, and Mark Zuckerberg must be 'zucking' his thumb with cash!

Friday's Trade Setup

Been a while not posting in this blog for the market most of the time giving you feel not to do something or not giving you great ideas what or how to participate especially the past weeks because of uncertainty in the  market. I phrase uncertainty or unpredictability because the market (or Mr. Market) make its move in uncertain ways, in an uncertain time, and in uncertain day. Like the chart(s) below:

This 15-min chart of Crude is zigzagging in the overnight session until it reverses and leap vertically in the regular session. Notice that resistance level (the line below), it is a powerful point where the market bounced opening for an entry above that trend line (above). If you understand the trend(s) as what Trader Vic of the Wall Street Master implies, you can have an idea how to make/put trades, and this is one of his example, the change in trend.

For the Gold 30-min chart second below, it made a tight consolidation in the overnight session for its powerful reversal. Price action and level observation (the support/resistance) is the right approach to deal in this kind of trade.

 

 

Tuesday's Trade Setup

A nice triangle formation from the 15-minute chart of the Gold futures contract in today's market. Spotting this kind of setup or formation needs keen understanding of the price action as well as the bars formation relative to multiple time frame. This is where pattern recognition in trading the market is a must for discretionary traders.

Labor Market

No market today for it's holiday, but the futures markets are open because it operates electronically. The indices (Nasdaq, NQ) were all gap up today, but the Crude and the Gold were gap down. The Nasdaq formed  a deep cup with a handle pattern. The Crude formed a small double cup but minus the handle (not able to sustain the load and it bends). While the Gold made a reversal forming a 'u' pattern like. All are in 15 - minute chart frame.

 

 

Better to Trade in the Overnight Session

It's better to trade in the overnight session (for Futures markets) because most of the participants are busy snoring. Not much noise and the market moves are quiet and smooth. And you can capture the big move in the overnight session because that's where the European and the Asian markets are active. Just take a look at the chart below for the Crude and the Gold and see/compare the movement from the overnight session (rectangle area) and the regular open (circled area). Just don't sleep and you can make a decent trade. You can have your decent sleep after you make your trade in the overnight session and let the suckers fight it out in the regular market.