Stock Market Video: Revealing The Next Market Move

December 31, 2011

In 2012, the markets will continue their wild ways. This will be ideal for swing trading. The current S&P 500 is sitting in a triangular pattern. There is a neutral to positive rating on this pattern for the first few days of 2012. It should break to the upside. If it fails or does not break within the first two trading days of 2012, the downside is big. This video gives you the insight into the 2012 year. It gives you the proprietary analysis of the pros.


Markets Are Set To Jingle All The Way

December 23, 2011

This is the final trading session before the Christmas holiday, therefore, traders should expect a very light volume trading day into the closing bell. The light volume will generally favor a slight upside bias. Yesterday’s trading volume was extremely light, this tells us that most of the institutional traders that move the markets are already in holiday mode. Unless some unforeseen geopolitical event takes place today the market should hold up. This morning, the S&P 500 Index e-mini futures (ES H2) are trading higher by 4.00 points to 1253.00 per contract.


Markets Are In Holiday Mode, However, Italian Confidence Vote Could Spoil The Party

December 22, 2011

This morning, the S&P 500 Index e-mini futures (ES H2) are trading higher by 4.75 points to 1241.00 per contract. The major stock market indexes all look to be in holiday mode and may just float slightly higher on light volume. The one wild card that could spoil the stock market rally is a confidence vote in Italy today to approve the 33-billion-euro ($43 billion) austerity package. This vote should get passed as it is not expected to face much opposition in the Italian government, however, we can never be too certain when it comes to Europe.


This Is When You Should Trade

December 21, 2011

The First Hour Is For The Day Traders

Active markets are always the best markets for trading. Anyone who has ever traded these markets for a considerable amount of time knows that the first hour to ninety minutes is the best part of the trading day. This is a time period when there is volume in the market and the key support and resistance levels are great for trading.

If you have ever looked at an intra-day chart of a stock or index you will notice that the trading volume declines dramatically after the first hour to ninety minutes of the session. The morning period is when day traders must seize the moment. This is when the markets are most active, once 11:00 am rolls around the markets become manipulated by the institutional traders. The institutions aim to simply stop out small retail futures traders. Take a look at the choppy sideways range experienced in the chart below after 11:00 am and you will see what I mean.

This type of game playing goes on everyday in all active stocks and indexes. Sure, once in a while the markets will be active throughout the entire session, however, that is not normally the case. All leading stocks such as Google Inc.(NASDAQ:GOOG), Chesapeake Energy Corp.(NYSE:CHK), and Broadcom Corp.(NYSE:BRCM) become difficult to trade after the morning session. These are just a few of the countless stocks that will trade in an erratic manner after the first ninety minutes of the day. Day traders should focus on the morning session and leave the three hour lunch time game playing to the institutions.

Nicholas Santiago

Traders Should Expect A Pause Day After Yesterday’s Rally

December 21, 2011

This morning, the S&P 500 Index e-mini futures (ES H2) are trading lower by 4.00 points to 1232.00 per contract. Yesterday, the major stock indexes soared sharply higher on better than expected news out of the European Union and the United States. Often after a big rally the next trading session is usually much more subdued, therefore, traders should look for a pause day or even a possible small retrace day in the market. Nearly every trading session the stock market will often gap higher or lower, these morning gaps are signs of an unhealthy stock market. Traders should continue to watch the U.S. Dollar Index futures (DX H2) very closely as the major stock indexes continue to trade inverse to the dollar.


Professional Boxer, Doctor… Now It’s The Traders Turn!

December 20, 2011

What Does It Take To Master The Markets? Many times in my career I have encountered new traders who believe they have the ability to master the markets after reading a book on trading, or even because they have obtained some form of degree. Most often the first question I ask them is; are you a fundamental trader? Fundamental traders are those who generally read a companies balance sheet, (example-EPS, PE, EBITDA, book value, etc.) or perhaps they are a technical trader which is someone who uses charts of past prices, patterns, and stock market cycles. More often then not the trader is unsure of a specific methodology and is typically dependent on someones opinion to invest or trade a stock, usually from a book or talk show. Within minutes, I realize that the new investor or trader is grasping onto a dream encompassing an optimistic hope mode.

Trading is one of the most rewarding, yet highly demanding ventures that an individual can pursue. Often I compare the markets to the world’s largest arena filled with gladiators from ancient Roman times. There is over a billion shares traded everyday globally and the participants range from huge institutions such as insurance companies, commercial companies, hedge funds, mutual funds, banks, broker dealers, down to the individual investor. These participants have different types of goals and strategies that are being applied. Many institutions and traders have a longer time frame horizon and are looking for larger gains from the market. Then on the flip side there are many institutions and individual traders that are trading in a shorter time frame and looking for smaller gains. This is all part of the vast ocean of trading and investing. Yes, the big fish does eat the small fish, and the food chain theory is alive and well in the global trading world.

As most people, I’m a sports fan and enjoy watching a good athletic event. In the past few years the very popular sport of mixed martial arts has emerged to the forefront of athletic competition. This is a dynamic and fascinating sport that is very diverse and requires countless hours of physical training, studying, dieting, mental strength, and a true dedication that few can achieve. Recently I had the privilege of meeting a mixed martial arts competitor and I asked him how he got started in this sport? The fighter informed me that he was originally a boxer, later studied the martial art of Judo, and now he concentrates on the martial art of jujitsu. I then asked him if he learned the basics in Judo and Jujitsu and combined the techniques? Again, to my surprise he is a black belt (expert) in both martial arts. This means he is a black belt in two different forms of martial arts, as well as a professional boxer. The next statement was a something that I will never forget. He said, “I still need to continue to learn everyday and master more if I’m to continue excelling in the sport. I’m forever a student of mixed martial arts.” Then it really hit me. This is what it takes to be successful in anything that you do and the reason why only a few are able to reach the elite level.

So what does it take to become a successful trader? This is a recipe that I’m certain will be different for each individual. It is truly an endless journey. The more you seek, the more you will find and there is surely more than one way to achieve your goal. In my personal journey to learn and understand the markets over a decade I have read over 200 books on the markets. Many of those books I have read two, three, and some four times. I have watched countless recorded trading videos, attended over 100 live seminars, and worked personally with some of the best traders alive. I have studied every bull and bear market in history and continue to learn and discover new market patterns and cycles every day. I know and believe that I still need to learn and master more as this is an ever changing arena. I am forever a student of the market. True market mastery is not a nine to five job where you punch a time clock. The real work usually begins when the market closes at 4:00pm ET. Every evening, I usually spend three to four hours reviewing charts and looking for setups for the next trading day. Reviewing charts on multiple time frames and performing multiple mathematical formulas is the norm.

In order to be successful in anything you must have a true passion. Trading is no different then a doctor, lawyer, accountant, or any other profession. A comedian I saw said it best, “a person with a job can’t wait until 5:00pm for the day to end so he can go home. A person with a career doesn’t even know its 5:00 pm and when at work he thinks he is home.”

Trading is a skill that takes a life time to master. However, it is the best and most rewarding profession in the world with many perks. Be your own boss, make unlimited amounts of money and learn how to read people. After all, when you trade you are not just trading stocks but people and their emotions.  Learn the proper tools, keep learning, and make a fortune.

Nicholas Santiago

Markets Start Strong As The U.S. Dollar Dips

December 20, 2011

All of the major stock index futures are trading higher ahead of the opening bell. This morning, the S&P 500 Index e-mini futures (ES H2) are trading higher by 14.50 points to 1213.50 per contract. The catalyst for the move higher is once again better news out of the European Union, however, it is really the decline in the U.S. Dollar Index futures (DX H2) which is the real catalyst. As we should all know by now, when the U.S. Dollar declines the major stock indexes will inflate and trade higher. Last night, the U.S. Dollar Index futures tumbled sharply lower and that sparked a rally in the futures. The U.S. Dollar Index chart is still one of the most important charts that any trader can follow at this time.