Market Timing Comment - 02/10/2006
At Elite Trader, I answered this question from a reader. I hope it offers some insight into how traders trade and how investors should mimic the same discipline, but in a different timeframe, of course.
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Quote from fader:
hi W.B.! - hope you are well and thanks for continuing to update the journal here - i'd be very interested if you could highlight a couple of points behind your rationale to re-enter long on Wednesday open (Feb 8) ? - it was a great entry by all means, although i am agreeing with you that the overall structure is looking a bit hectic at this time - thanks and all the best.
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fader,
Unfortunately, sometimes we enter at time loci that catch the momentum low and not the price low and vice versa. This can be costly if commissions are added to small losses when stops are hit. In the current deregulated brokerage industry, round trips are a negligible expense.
Also, the structure was allowable from the high to allow a completed look ot the internal structure. So, if we have price, acceptable structure and volume patterns corroborating at a time locus, then it's time to go and enter.
Re-entry was simply a matter of still being right about the trade and sticking with our discipline which centered around using the SPX stop to exit all of the swing position.
A look at the OEX, Dow, and NYA might have kept us in the trade, but that was not our plan. The SPX pullback intraday to nearly 100% was enough to shake out even strong hands - unless you noticed the smallish gap that it covered.
Sometimes gaps matter soon and other times they don't matter at all.
I'm still trying to 'learn' this blog medium. It can't be that hard! Lots of people displaying shallow thoughts have figured it out! :) I'm confident I will too.
Good Trading and God bless
W. B. Busin
Friday, February 10, 2006
Timing Market Turns
Annoyance with time stamp
This a test. I have opened this post at 1555 EST. I believe that the time stamp should reflect that. It should not reflect the time I click on publish which is now 1601 EST
To: Mr. C in Switzerland
This time stamp is not an option to change in Blogger. Sorry! :)
I will continue to try to post the actual time a post is published at the header.
WBB
Timing Market Turns Update #2 - 02/10/2006
Update for Investor core position. 1545 EST
The SPX price has nearly completed its first movement off the intraday low. We believe it more prudent to wait until Monday's opening indications for a better entry in the morning.
We will be watching the Globex futures for a better feel for this entry of our investment core package.
We also are very encouraged by the late day action across the various indexes. We project that the next significant time loci of February 24th and February 27th to mark both a swing high and the beginning of a correction into the March 13th time locus turning point.
Good Trading and God bless
W. B. Busin
Timing Market Turns Update 02/10/2006
Update for Investor core position. 1521 EST
We are still in cash but the strong action this afternoon has opened the window for entering near the close.
This type of upward rebound was given a 30% chance in our last post but it seems we might have been a mite pessimistic.
Our time horizon for an investment position is a minimum of 10 days here.
We will still update between 1530 EST and 1545 EST.
Notice:
For some reason this blog is not showing our posting time as Pacific Standard and is in fact, an hour off the real time. Until I can fix this issue I will post the time above near the heading in Eastern (N.Y. time).
Timing Market Turns - 02/10/2006
Swing Trade- still 100% long
Investment Trade - still 100% in cash
We are letting our stops tell us that we are wrong. Our SPX stop is the trigger for the Dow and SPX swing trade. That stop is at the SPX 1250. For the weaker NDX, our stop is at NDX 1630, just below the January low. The stops are mechanical and remain in place on a swing until taken out or moved to protect profit after day 3 or 4 of the swing.
After seeing more than a few tops develop over the years, a characteristic always present during the process is the different structural 'looks' of each senior index. This is evident currently by simply comparing the NYSE, S&P 500 and the NDX.
The structure that I want resolved at this time for all the indexes is whether we are in a corrective bottoming process of the downward correction from last month's high, or is there more downward correction to go.
As to the NDX (and the Composite), the early January sizeable gap at NDX 1600 requires redress and covering. When that will occur is not in my ability to predict. I do believe that it weighs on the index's strength needed to move upward. I don't believe as many do that it affects other indexes like the NYSE or the Dow.
Strong intraday resistance barrier levels are at SPX 1269, NDX 1665 and Dow 10940. As you can see quite a great area exists above the current levels (at 1230 E.S.T.) for failure, especially in view of how easily the indexes have declined in recent weeks versus the struggle to rise in upward moves.
All said, we will take the swing position into the weekend if the indexes can close near or above those optimistic intraday resistance levels. We see that as less than a 30% possibility.
We will update at the 1530 E.S.T. intraday peak we expect in that timeframe.
Good Trading and God bless
W. B. Busin
Wednesday, February 08, 2006
Market Timing - 02/08/2006
For Traders - Modest risk trade, tight stops
For Investors - Staying safe in cash vehicles
We are re-establishing 100% long swing positions at the open. Our stops are just below SPX 1250.
Our core investment position will enter long on a close above SPX 1268.
Good Trading and God bless.
W. B. Busin
Market Timing - 02/08/2006
For Traders - Modest risk trade, tight stops
For Investors - Staying safe in cash vehicles
We are re-establishing 100% long swing positions at the open. Our stops are just below SPX 1250.
Our core investment position will enter long on a close above SPX 1268.
Good Trading and God bless.
W. B. Busin
Tuesday, February 07, 2006
Timing Market Turns - 02/07/2006
Our stops have been hit or are so very close that prudence calls for covering the swing positions.
We are 100% in cash now.
We will update later today before the close.
Good Trading and God bless.
W. B. Busin
We are currently 100% long in our swing positions, but have stops at SPX 1258 level.
We are still 100% in cash in our core investment position.
The upward swing signal may have been a strong penultimate one that may have caught the momentum low but not the price low on SPX.
The structure is beginning to look ragged, so I wouldn't be surprised at a test of SPX 1250 sometime this week. This choppy market topping action is great for trading but is difficult when attempting to set in place an investment package.
There are time loci for Tuesday, Wednesday and Friday too. There has not been enough volume action to raise any of those loci to prominence through Monday's trading.
So we remain patient and will let our stops work.
As always, we will update on a break out if the narrow range. Breakouts from a range are often preceded by a false break in the opposite direction. We will watch for confirmation of such a break or fake.
Good Trading and God bless
W. B. Busin
Timing Market Turns - 02/07/2006
We are currently 100% long in our swing positions, but have stops at SPX 1258 level.
We are still 100% in cash in our core investment position.
The upward swing signal may have been a strong penultimate one that may have caught the momentum low but not the price low on SPX.
The structure is beginning to look ragged, so I wouldn't be surprised at a test of SPX 1250 sometime this week. This choppy market topping action is great for trading but is difficult when attempting to set in place an investment package.
There are time loci for Tuesday, Wednesday and Friday too. There has not been enough volume action to raise any of those loci to prominence through Monday's trading.
So we remain patient and will let our stops work.
As always, we will update on a break out if the narrow range. Breakouts from a range are often preceded by a false break in the opposite direction. We will watch for confirmation of such a break or fake.
Good Trading and God bless
W. B. Busin
Monday, February 06, 2006
Market Timing - 02/06/2006
Update 1555 E.S.T. - We are still holding 100% long. More later this evening.
Market Timing - 02/06/2006
We remain 100% long in our swing trading index positions. We have stop loss orders in place at the SPX 1258 level.
The lateral movement may continue into Tuesday trading. We are growing uncomfortable with the lack of an upward lift.
We will update before the close or if our stop levels are executed.
Good Trading and God bless
W. B. Busin