Timing Market Turns 5 - 04/07/2006

Market Timing - posted at 1837 EST


Swing trade - SPX 1298 stop hit - 100% cash positions.

Investor core - SPX 1298 stop hit - 100% cash positions.

A small gap at SPX 1301 was just covered. I expect the 1100 EST to be a high.

1145 would then likely be a low.

We have moved to a full cash position. The trades are executed at the respective index's closing price.


Looking at the three indexes and their structures will explain why we have separated them into different blogs. We will also trade them separately on TimerTrac. The system lost on the Dow trade, made a few points on the SPX and approximately 50 pints for the NDX trade.

It is further evidence of different structures setting into a top formation.

Are you disappointed because of the Dow loss? because of the small gain in the SPX trade? have you been ecstatic about the large gain in the NDX, but now that we have closed it, you are a fair bit sad and still long your NDX position?

Be truthful with those questions.

Just to yourself, don't tell me.

This answer will tell you what you are mentally as a trader or investor.

If you answered yes to any part of that extended question, just face the reality that you are unfortunately quite normal! Yes, normal. Normal does not go far to find a large flock of their own kind. Mr. and Mrs. Normal are the ones that will have reason to be confused in a day or two.

If you answered with integrity that you had no emotional attachment to these last trades. Then you may be in a solo circular high altitude flight with a few other birds of prey. Trading AND investing is little more than seizing high probability opportunities and coldly executing your plan of attack. The young birds of prey dive more often and miss, the veterans dive when the possibilities or probabilities are worth the risk. Veterans don't mind missing, it is just part of the stalking of the hunt, the game's bet management.

If you think this was a put down or a silly analogy or an attempt to seem superior, you are mistaken. It is how traders think. Nobody gets to win the game or be a bird of prey before they learn the rules of the contest do they. How did I feel/think as the SPX went to 1298? As I was executing the orders, the one thought was "the market needs a rest, does it? Well, then, let me get ready to short these buggers."

In that view, Monday might be quite a mess. Gapping down more than 10 SPX points or more may not be covered for weeks. I hope for an up open and sideways to allow the last few of the smart money holders out of the ring before the pitch battle is entered.

I will discuss more on this tomorrow after we run numbers for the downward move to come. The turn is at hand. It may start a day early or right on time on Tuesday. More on that later, as I say.

If you don't trade with leverage, as in futures or shorting stocks, I will have a suggestion or two for those not wanting to carry that risk.

Housekeeping: Questions about the sponsors and supporting us here - thank you again for those comments and support in that area. The sponsors actually bid on position in the grouping you see, the most for first position, etc. We cannot ask for a particular sponsor as has been asked by several readers. We can 'ban' certain sponsors if we thought it was best. But we have not seen any sponsor that is unethical or not worthy of credibility. Google's massive computers do all the placement of each sponsor based on the key words that a sponsor wants to be associated with in their campaigns.

Again we thank you for looking into these sponsors. They seem to be a fine lot.


More Saturday afternoon.

Good Trading and God bless

W. B. Busin

P.S. Blog humor - Blogger, our host, is owned by Google. The text entry page has a nice and easy to use format with a spell checker. When I have time I use it. BUT, the spell checker does not recognize the word 'blog' or the word 'google'!! :)