After two down days to start the month, watch for this price pattern.

Tuesday, May 3rd, 2011 at 6:55pm  (Rennie Yang from Markettells.com)

The S&P500 has kicked off the month of May with two consecutive lower closes, the first string of back-to-back
down days to start the month since last July. An effective way to trade early month weakness is to simply wait for
the market to recoup that loss. If it can, at any point before the end of the month, it invariably leads to a tradable
rally. The table below illustrates this point. The first date shown is the second session of the month when the S&P
closed lower for the second day in a row. The second date is when the S&P closed back above the previous month’s
settlement and the number of sessions elapsed. For instance, using the most recent signal, the S&P closed lower
two consecutive sessions at the start of the month on 7/2/10. Two sessions later, on 7/7/10, the S&P erased that
loss by closing above the prior month’s close. That’s the trigger date, and you can see the S&P rose 3.3% over the
next five sessions…
SPX Starts Month w/ Two Down Days, Before End of Month S&P Closes > Prev Month’s Settlement
07/02/10… 07/07/10 (2)… S&P500 +3.3% one week later
10/02/09… 10/07/09 (3)… S&P500 +3.3% one week later
09/02/09… 09/08/09 (3)… S&P500 +2.7% one week later
03/03/09… 03/12/09 (7)… S&P500 +4.4% one week later
08/04/08… 08/05/08 (1)… S&P500 +0.4% one week later
06/03/08… 06/05/08 (2)… S&P500 -4.6% one week later (*)
12/04/07… 12/05/07 (1)… S&P500 +0.1% one week later
03/02/07… 03/20/07 (12)… S&P500 +1.3% one week later
11/02/06… 11/06/06 (2)… S&P500 +0.3% one week later
03/04/03… 03/17/03 (9)… S&P500 +0.2% one week later
08/02/02… 08/14/02 (8)… S&P500 +3.2% one week later
04/03/01… 04/10/01 (5)… S&P500 +6.0% one week later
11/02/99… 11/05/99 (3)… S&P500 +1.9% one week later
08/03/99… 08/16/99 (9)… S&P500 +2.2% one week later
03/02/99… 03/04/99 (2)… S&P500 +4.1% one week later
06/03/97… 06/06/97 (3)… S&P500 +4.1% one week later
03/02/95… 03/10/95 (6)… S&P500 +1.2% one week later
10/04/94… 10/11/94 (5)… S&P500 +0.4% one week later
01/05/93… 01/14/93 (7)… S&P500 -0.1% one week later
12/02/92… 12/04/92 (2)… S&P500 +0.4% one week later
10/02/92… 10/26/92 (16)… S&P500 +1.1% one week later
11/04/91… 11/07/91 (3)… S&P500 +0.9% one week later
01/03/91… 01/18/91 (11)… S&P500 +1.2% one week later
05/02/89… 05/12/89 (8)… S&P500 +2.4% one week later
02/02/89… 02/07/89 (3)… S&P500 -2.6% one week later (*)
12/02/88… 12/05/88 (1)… S&P500 +0.6% one week later
10/04/88… 10/06/88 (2)… S&P500 +1.0% one week later
08/04/87… 08/06/87 (2)… S&P500 +3.9% one week later
06/02/87… 06/03/87 (1)… S&P500 +1.4% one week later
05/02/86… 05/05/86 (1)… S&P500 -0.1% one week later
The S&P was higher one week later in 26 out of the last 30 occurrences, or 87% of the time, significantly above the
57% random chance for a higher S&P one week later. Average gain was 2%. This signal will be triggered anytime
in the month of May on an SPX close above 1363.61.

"leaving the consolidation"

We are approx. an hour into the trading day and mcp volume is around 400% higher than yesterday at the same time,
looks like it wants to continue upwards. If the volume crosses 6.4mil. shares today we'll have a "pivot buy point".
Watch the overall market, there is distribution among leaders today. Keep your stops in place and don't let profits disappear and/or losses ride. Day-By-Day follow your plan.

The information contained herein is not, and should not be construed as an offer to sell or an offer to buy any securities

Reversal day makes higher high and closes below today's open and yesterday's close.

Looks like a danger signal to me. Not all danger signals are correct, no rules are 100% right, but if you pay attention to them consistently, you will profit in the long run.

On being wrong.

http://www.ted.com/talks/kathryn_schulz_on_being_wrong.html

" responsibility; ability to respond "

"it is human emotion that always gets in the way of intelligence"

The ability to respond at the right moment, regardless if the trade is going well,  not so well, or awful at that moment,  is the traders edge and must be a part of the plan. That’s what trading is all about. It is about the ability to make a decision.

The only way that I know of, that works for me, is to be moderate. When my positions are moderate I am emotionally detached, patient, acting in my best interest following my plan.

"consolidating"

"breakouts lead to trends, trends lead to extremes, extremes lead to backing and filling, backing and filling leads to consolidation, consolidations lead to breakouts"
Wash, Rinse, and Repeat.

check blogs,  March 31, China capping its annual rare earth output.
                     April 4,  Why can't most people buy the all time high ?

The information contained herein is not, and should not be construed as an offer to sell or an offer to buy any securities

follow up, " Pivotal Points "

Possible change in basic market direction, and the perfect psychological moment to act at the beginning of a new move. maybe!

The information contained herein is not, and should not be construed as an offer to sell or an offer to buy any securities

follow up, breakout through "pivot buy pint"

The information contained herein is not, and should not be construed as an offer to sell or an offer to buy any securities

First thing first. Before we make money

Everything starts with a belief system, as it determines our experiences in life and trading.
We don't trade the markets, we trade our beliefs about the markets. Knowing that, we have to have a plan that is supported by our beliefs or we have to change our beliefs in order to get results we want. Desired results are therefore the starting point in developing our trading plan and dictate the plan we chose.

" Pivotal Points "

There are  market patterns that work as I have observed and learned. One involves a market rising from a bottom, and another one is a falling market. Basically, the trend is your friend. Moderation and Patience for Confirmation are required for that style of trading.

The information contained herein is not, and should not be construed as an offer to sell or an offer to buy any securities

"gaps"

check blog : March 28

Is there a viable way to trade gaps ? 

Basing after big run.

    Moved over 500% in 10 month since its IPO, and is in the top group, and is in the normal basing process.
      BSFT is expected to announce its earnings before open on Mon. May 9.

The information contained herein is not, and should not be construed as an offer to hold, sell or an offer to buy any securities

"Constructive base"

Polypore International (PPO) has been consistent leader since the beginning of this upward trending market and is in a top group. Earnings release is expected after the close on Wed. May 4.


The information contained herein is not, and should not be construed as an offer to sell or an offer to buy any securities

U.S. Dollar Index

The path of least resistance is downward.

After Bernanke's press conference.

The dollar continued lower while precious metals headed higher. The general market headed higher as well. In other words, the market sees a continuation of devaluation, money printing, and rising prices.

"road to truth"

"There are two mistakes one can make

                                                         along the road to truth - not going all
                                                           the way, and not starting." - Buddha

                                                               Illustration by jared@flickr

Silver

While the secular bull market in precious metals remains intact, and silver is still well under its inflation adjusted peak price of $129.59 achieved in 1980, silver is highly volatile, typically moving two to four times the moves of gold, thus it is prudent to keep a close eye on signs of intermediate term tops especially after the huge move we have seen in silver.

The information contained herein is not, and should not be construed as an offer to hold or an offer to sell or an offer to buy any securities.

U.S. dollar nearing major infliction point

A good interview given by legendary investor Jim Rogers:

http://www.hedgeworld.com/blog/?p=2485&utm_source=twitterfeed&utm_medium=twitter

" follow up "

Last Lecture.

worth while watching

http://www.youtube.com/watch?v=ji5_MqicxSo

Happy Easter to everyone. I hope you all have a great one!

traditionally a time to think of new beginnings