Results of Monday’s Best S&P Turning Points: The suggested short @ 4157.00 triggered during the Globex this morning @ 5:45 ET. This trade is filtered out due to the CPI announcement @ 8:30 (the volatility is predictable, but the direction is definitely not).

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Holding off on selecting the turning points until the CPI is released and the volatility is assessed. 

The World Sentiment Index: (+100/-100) RISES from +21 to +29 in a world of mixed sentiment and low volatility. Historically price closed down from the open 56% of the time with drops averaging 50% more than rises.   

Catalysts: CPI @ 8:30. FOMC members speaking @ 11:00, 11:30 & 14:05. 

Quick Tip: Lethal Bias 

Have you ever looked at your trade result and said to yourself “If had a bigger stop it would have been a winner” or “If I...

Results of Friday’s Best S&P Turning Points: Neither trade suggestion triggered during a narrow range day. They remain active. 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Buy 4029.75 stop 4024.25. Short 4157.00 stop 4161.75. 

The World Sentiment Index: (+100/-100) JUMPS from -57 to +21 in a world of mixed sentiment and low volatility. Historically it’s a coin toss which way price closes.  

Catalysts: Nothing on the economic calendar, waiting on CPI tomorrow. 

Quick Tip: Adapting

Markets change character. They trend until they don’t. Volatility cycles. This means you must adapt your rules to these changes. 

But how? By re-framing your thinking about trade outcomes. Instead of allowing losers to give you negative feelings and winners to give you positive feelings, re-frame both outcomes into learning events. 

...

Results of Thursday’s Best S&P Turning Points: The buy @ 4131.50 offered 10.50 points.

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Buy 4029.75 stop 4024.25. Short 4157.00 stop 4161.75. 

The World Sentiment Index: (+100/-100) PLUMMETS from +71 to -57 with all major world markets except Tokyo very Bearish on higher volatility. Historically price has closed down from the open 73% of the time. 

Catalysts: Consumer Sentiment & Inflation Expectations @ 10:00. Oil soars on Russian production threat. 

Quick Tip: Sequencing 

If trading is 80% psychological that leaves 20% to the edge your strategy has. We really don’t know if the 80% figure is accurate but you’ll hear a big number like that from many skilled traders and coaches. Regardless the accuracy, how we behave as traders is vitally important. 

Back when racquetball was popular I...

Results of Wednesday’s Best S&P Turning Points: Neither suggested trade triggered. 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Buy 4131.50 stop 4126.50. Short 4206.50 stop 4212.25. 

The World Sentiment Index: (+100/-100) SOARS from zero to +71 with all major world markets except Tokyo very bullish on higher volatility. Historically it’s a coin toss which way price closes but the up closes are much greater than the down closes are lower. 

Catalysts: Jobless Claims @ 8:30. Nothing else obvious.  

Quick Tip: This is Real

ChatGPT is certainly amazing technology. I don’t use it to write this blog, which it can do, but I do use it for research, much like you would use a search engine. 

For example, today I wanted to find a fresh quotation or two about trading psychology by well-known authors Brett Steenbarger, Mark Douglas, and...

Results of Thursday’s Best S&P Turning Points: The suggested buy @ 3853.25 only bounced for 4.50-points before stopping out.  

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Buy 3835.75 stop 3830.25. Short 3924.50 stop 3930.25. 

The World Sentiment Index: (+100/-100) EASES from +21 to -7 in a world of mixed sentiment. Historically the close was higher than the open 74% of the time. 

Catalysts: Durable Goods & Personal Income/Outlays @ 8:30. New Home Sales & Consumer Sentiment (including Inflation Expectations) @ 10:00.

Quick Tip: Feedback 

How is my trading going? That’s a question you should be asking yourself on a regular basis. Think hard, be critical, answer honestly. And don’t worry about talking to yourself, we all learned that’s OK during Covid lockdown. 

What you’ll find when you question your results critically...

Results of Monday’s Best S&P Turning Points: The buy @ 3865.50 ran for 16.25 points, but the breakout did better. 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Buy 3811.75 stop 3806.00. Short 3883.25 stop 3888.25.

The World Sentiment Index: (+100/-100) DROPS from -7 to -57 with most major world markets leaning Bearish. Historically the close is lower than the open 56% of the time. 

Catalysts: Housing Starts @ 8:30. BOJ gets Hawkish, USD weaker.  

Quick Tip: Flexibility

Yesterday’s buy was good for a modest winning run before reversing and eliminating the origin, a prior high-volume level. 

Understanding the origin of these high-volume levels is important. Think of them as battles. High volume simply means plenty of buying interest AND plenty of selling interest. Classic Bull/Bear fight. 

The entry was won by...

Results of Friday’s Best S&P Turning Points: The buy @ 3976.75 was only good for a 7.75-point bounce. 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Buy 3865.50 stop 3861.00. Short 3924.50 stop 3930.25

The World Sentiment Index: (+100/-100) jumps from -50 to -7. Historically, price has closed higher than the open 74% of the time. 

Catalysts: Maybe the Housing Market Index @ 10:00. Nothing else obvious. 

Quick Tip: Probabilities Rule

One certainty we have in trading is that price will move. Which way and by how far are what we must figure out. Guessing doesn’t work. Using probabilities based on a large body of evidence does (at least enough of the time). 

You get your probabilities by capturing and analyzing your trade data (lots of it). Most traders will initiate a strategy by back-testing and documenting what happened. The more...

Results of Thursday’s Best S&P Turning Points: The buy @ 3929.00 stopped out. 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Buy 3876.75 stop 3871.75. Short 3924.50 stop 3930.25

Globex View: Bouncing from a strong drop. 

The World Sentiment Index: (+100/-100) eases from -64 to -50 with the Western world very bearish, Asia neutral. Historically, price will close lower than the open 56% of the time.  

Catalysts: PMI Flash @ 9:45. Global recession risk rises. Triple Witching volatility.

Quick Tip: Third Friday

How does your strategy perform on the third Friday of every month? Options expiration day tends to increase volatility, especially later in the day. 

Today is a special expiration day, Triple Witching, where stock index futures, equity index options, and stock options all expire. This occurs quarterly and since this is the final quarter of the year there...

Results of Wednesday’s Best S&P Turning Points: No trades. 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Buy 3929.00 stop 3923.25. Short 4074.50 stop 4079.50

Globex View: Trending down.

The World Sentiment Index: (+100/-100) PLUMMETS from zero to -64 with most major world markets Bearish on rising volatility. Historically, price will close higher then the open 54% of the time.  

Catalysts: Jobless Claims, Philly Fed MFG, Empire MFG & Retail Sales @ 8:30. Industrial Production @ 9:15. Business Inventories @ 10:00. 

Quick Tip: Hardest Lesson

If you’re a discretionary trader intuitively making entry and exit decisions AND you’re successful, congratulations! You are a rare breed. It’s not that discretionary trading doesn’t work, it’s that to succeed takes years to hone the skills. 

This leaves rule-based trading the best...

Results of Tuesday’s Best S&P Turning Points: Price reacted wildly to the CPI release cancelling the short level @ 4123.50, the long level never triggered. 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Holding off on reversal trades today with continued volatility expected from the FOMC Announcement & Press Conference. 

Globex View: Ranging. 

The World Sentiment Index: (+100/-100) DROPS from +36 to zero in a world of mixed sentiment and low volatility. No historical edge. 

Catalysts: Import/Export Prices @ 8:30. EIA Petroleum Status Report @ 10:30. FOMC Announcement @ 14:00. Press Conference @ 14:30. 

Quick Tip: FOMC Trading

The pattern tends to be range-bound before the announcement and spiky afterward. This should help your trade selection and planning. In fact, if you have solid historical data on your strategy’s performance on FOMC day you might not...