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Day trading methods that work in the real world transcript


Published on - There are dozens of different day trading strategies that you can apply to the markets. There are only a handful of day trading strategies that offer low risk and high reward per trade. Learn how to trade day trading strategies that will increase your profit factor and decrease your risk profile at the same time. Learn how to swing trade and day trade at market geeks today.

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Day trading methods that work in the real world transcript

  1. 1. 1. Good day everyone and welcome to the premium video newsletter for July 31, 2013. I can’t believe it’s the last day in July… where is the summer going but the good news is in just a month from now volatility will pick up once again and things will be relatively back to normal,….. if there is such a thing in the financial markets. 2. Today we had the GDP numbers, U.S. economic growth accelerated this quarter to a seasonally adjusted annual rate of 1.7 percent, as businesses spent more and the federal government cut less. The Commerce Department says growth improved from a sluggish 1.1 percent rate in the previous quarter. The pickup in growth was surprising as most economists predicted a far weaker second quarter. Consumers increased their spending more slowly in the second quarter. And a surge in imports reduced growth by the most in three years. But the federal government cut spending only 1.5 percent. And state and local governments increased spending for the first time in a year. Economists are hopeful that growth could improve to around 2.5 percent in the third and fourth quarters. 3. The stock market opened higher on the surprising GDP growth but as anticipated sold off during the day before once again picking up momentum in the afternoon session and coming extremely close to breaking into new high territory before once again sinking before the closing bell. I did warn you yesterday that we were going to have some volatility today. The market has been consolidating for almost two weeks. Prior to this time we had roughly three weeks of pure momentum to the upside. The consolidation is not unusual after such a strong run, remember what I’m always saying the longer the trend the longer the consolidation and the longer the consolidation the longer and stronger the trend so we have to follow this simple principle right now. It would not be unusual or strange for the market to stay at these levels for another week or even longer before moving up to the next level. There’s also other factors we have to consider and that’s the various sectors that are not as enthusiastic about the upside as the SP index. 4. The transports for example are not nearly as strong right now as the broad market I’ve been bringing this sector to your attention only because we are at very important price levels right now and this index tends to lead around these areas. The transports are not showing nearly the strength we are seeing so this leads me to believe that we may not go down on the broad market but may continue to fluctuate till the rest of the market demonstrates similar strength. 5. If you notice we have the same story with the semiconductors, so I hope you see exactly why the broad market is having such a difficult time and is so torn around these levels. If the broad market was in agreement we would have easily broke to new highs by now. This is why the picture is getting very interesting, we are near all time price highs, the time of year is summer and some sectors are showing weakness which by the way is also not very common near new price highs. What you
  2. 2. typically see is all the indexes correlating more closely near these levels but everything is out of character with the indexes right now and I believe the cause of all this is the monthly infusion from the feds which is artificially fueling the U.S. stock market. 6. Tomorrow morning we have the jobless claim numbers which is something the fed is watching very carefully so this should have some interesting effect on the bond market which is once again overreacting which is not uncommon after surprising GDP numbers. Yesterday, I anticipated that we would have a breakdown to the downside, although I secretively confessed that I was hoping for negative data and a breakout to the upside so that I could short this market at a higher level which is my ultimate goal. Notice how the bond market broke down but regained much of the losses by the end of the trading day, this is exactly what I mean when I say the bonds have a tendency to overreact and this is one of the reasons they are great candidates for range bound trading. Just when you think they are going to a new price level they just come right back to where they were before. I will keep an eye on this market but expect more drama tomorrow as the jobless claim data is released. 7. Technically we had a break in the Aussie dollar; we were anticipating a break because we saw very little upside pullback after such a strong move to the downside over a sustained period of time as well. If you recall a few weeks back I mentioned that the Aussie is not oversold because the downside momentum was even and moving down predictably with fairly equal amounts of volatility and trading range. Most oscillators that measure oversold and overbought levels focus on the rate the volatility changes but this market was moving down very predictability over an extended period of time and this is why I was not surprised that we didn’t see much of a pullback, the only surprise I see is that we broke down quicker than I expected I thought after such a strong down move we would consolidate for a longer period of time, the next question becomes will this breakdown start another downtrend. This will largely depend on the news coming out of China in the next few days. I will continue to monitor this market and keep you posted. 8. Crude Oil has rebounded today from its correction. Just yesterday we covered the 50 percent retracement from a trend rule while using the crude oil market as a prime example and I stated that crude could easily correct to the 101 level and still move higher from there without violating the uptrend. We didn’t have to wait for the 101 level as the market couldn’t even break the 102 level before exhibiting strong volatility to the upside. There is strong fundamental uncertainty surrounding key Middle East countries such as Egypt right now and I think we will see crude move up for a few days. I don’t necessarily think we will break the high but I do believe we will at least see the 107 level. There is strong fundamentals surrounding this market and we have to consider them when analyzing the energy market. The energy market has also been moving higher on strong U.S.
  3. 3. economic data and today was no exception. We still have quite a bit of data this week to help determine the market’s direction, such as nonfarm payrolls on Friday, and 3 central bank meetings, starting with the FOMC’s announcement today. So expect more volatility from the energy market till the end of the week. 9. There are a few long 4x4 entries to today. The first one is Perfect world ticker symbol PWRD and the second one is digital globe ticker symbol DGI. That’s it for today’s session, I will update you tomorrow morning after the open or earlier if I see anything unexpected. Have a great night everyone.