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Lots of Upside Ahead for the Metals and Miners

Palisade Radio talks with Chris as he discusses his approach to trading and why technical analysis works for him. He focuses on the chart and price action and explains why investors need to follow a trading strategy that suits their personality.

He cautions that a broad sell-off is likely when stocks move into the next bear market. This liquidation will pull everything down, including gold, for a time. Afterward, he anticipates a massive rally in the juniors.

Time Stamp References:

0:40 – Chris’s early career.

3:25 – What led him to technical analysis.

5:30 – Stage Analysis and market trends.

8:15 – Why investors need a strategy.

13:40 – Indicators for market timing.

17:20 – Avoid too much information.


As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

Be sure to ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site to learn how to take advantage of our members-only research and trading signals.

Stock Market Reaches Pivot Point With Trader

Many online brokers are cutting their trading commissions to zero. There are ways to benefit from this beyond just zero commissions. It is now better than ever to buy individual stocks as opposed to ETF’s when investing in a sector. I talk about this topic and then interview Chris Vermeulen who runs thetechnicaltraders.com to get his take on the current trends of the markets.


GET CHRIS’ ETF TRADE SIGNALS – CLICK HERE

Chris Vermeulen on Gold, Silver, Miners, Crude Oil, Bonds, and Bitcoin.


As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

I have had a series of great trades this month. In fact, over the past 20 months, my trading newsletter portfolio has generated over 100% return when compounded for members and most importantly we did this with very little portfolio risk. And we locking in more profits on Tuesday with the Russell 2000 index. So, if you believe in technical analysis, then this is the newsletter and market condition for you to really shine.

Be prepared for these price swings before they happen and learn how you can identify and trade these fantastic trading opportunities in 2019, 2020, and beyond with our  Wealth Building & Global Financial Reset Newsletter.

Join me with a 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis.

FREE GOLD OR SILVER WITH SUBSCRIPTION – OFFER ENDS SOON!

Chris Vermeulen – www.TheTechnicalTraders.com

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Chris Vermeulen Tells You How To Become a Full Time Trader – Interview by: FuturesPortal.com

By Futures Portal

Chris Vermeulen www.TheGoldAndOilGuy.com a full time trader shares
his experience of trading futures and ETFs.
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You call yourself the “Gold and Oil Guy”, are the gold and oil sectors are your specialties?

I follow gold and oil closely and give my analysis, thoughts and trades ideas to my followers each morning before the market opens. While I follow them closely the SP500 is my baby and what I prefer to trade. I found that emotions run wild in the stock market and once you understand what state of mind the majority of traders are in, then you are able to accurately track and forecast future moves 1-3 days in advance.

How did you get started trading?

I started years ago in college trading from my laptop. It didn’t take long before I decided this was what I was meant to do for a living. I have never stopped since. I work with several financial websites and professional traders each week and trade each day either managing swing trades or taking a day trades.

What instruments do you trade the most?

Depending on the risk and type of trade (swing, momentum or day trade) I jump between trading ES Mini Futures, 1x ETFs, 2x ETFs and 3X ETFs. I prefer index trading specifically the SP500 as that has been my main focus for day one. It’s better to be really GOOD AT ONE THING than average at a bunch of things. This strategy has many benefits to it including less time searching for trade setups, less stress, lower risk levels etc…

How did you choose the time frames you trade on?

Choosing the time frames to trade took many years of trial and error. But I did eventually find a couple time frames which have proved to be VERY accurate when trading the SP500 specifically. Money flows in and out of the market in waves (cycles) and once I realized these cycles and could identify fear and greed in the market place finding and timing trades was the difference between night and day.
The really exciting thing about the SP500 and its cycles/timeframes is that I can trade full time and have trades almost every other day or site back and wait for the longer term swing trades and enjoy time with my family, friends and exercise. I have built a trading system that automatically breaths with the market using current volatility levels, various cycles, buy/sell volume levels and momentum and it alerts me in pre-market trading each day if I a buy, sell or position adjustment is to be made. The time frames I focus on are the daily, 30 minute, 10 minute and 3 minute.

Do you trade leveraged instruments? Do you trade them differently from non-leveraged investments?

I trade all types of instruments based around the SP500. In short, the more leverage I use the smaller the position I take and the shorter term the trade is.

For example I will trade the ES mini futures for day trades which are always closed out at the end of the day.

Momentum trades which last 1-3 days I will use a 2x or 3x ETF like SSO or SPXU to get more juice from a play but maintain a healthy risk level as overnight trading and price gaps cut both ways.

Swing Trades I take the largest positions in up to 50% of my trading account in a single position using a 1x ETF like the SPY. These trades can last up to 4 months at times.

I do at times make things a little more complicated when trading with a strong trend. Sometimes when I get a swing trade buy signal I will buy a position using the 1x ETF. If in the next 3 days I get lower prices of more than 1% against me while the uptrend remains alive I will add more of a position using a 2x and 3x ETF also. Once the market bounces back a little I close out the leveraged positions to a quick gain and continue to ride the swing trade. I do this same thing in down trends when I am on a hot streak and in the zone with the SP500.

What has been your biggest hurdle becoming a full time trader?

The toughest part of trading for me is keeping laser-beam focus on my strategy as it is mandatory for success. I work with, talk to and read a lot of market opinions of other traders each day and it can cloud my judgment causing me to break my own rules.

In your opinion, what do most traders don’t realize about the “game” of trading?

Most traders/investors do not understand risk/reward for positions. I would say 90% of people I talk with take much too large of positions in investments which carry very high risk. Also they do not use protective stops based of technical analysis/risk tolerances. Those are the two main things, but this list could go on and on… There are a lot of moving parts in the market and each must be closely monitored, managed and understood clearly.

Again, It’s better to be really GOOD AT ONE THING than average at a bunch of things meaning you should be jumping around trading random stocks, sectors, commodities and investment types like options, equities, forex etc… Just learn one, master it and then expand.

Without revealing your proprietary method, could you please tell us what tools you use for trading? Any specific indicators?

I am a technical trader so I focus 100% on Price, Volume and Momentum. News, economic data and rumors mean absolutely nothing to me. The only thing that pays traders is price action so that is what I follow. It’s simple supply and demand. High volume means there is power behind a move and momentum is how fast the price is moving on various time frames.

As long as you trade with the daily trend direction forget about picking market tops or bottoms you instantly have the odds in your favor. Problem is people always want to try and outsmart the market by going against the trend and trying to pick these tops and bottoms.
As for the indicators I use. Again they are simple and based off price, volume and momentum. Each of my indicators has been customized for the SP500 and is unique. I do like stochastics and bollingerbands but they each need to be tuned for the underlying investment to provide a trading edge.

What advice would you give new traders to start on the right foot?

I would tell a new trader to spend a lot of time thinking about what their ideal/dream lifestyle would be like if they could choose. Do you want to be looking at the computer and trading every day? Or do you want to always be in positions and actively managing them on a weekly basis so you can enjoy life little more? Or A mix of both?

Then you need to figure out what you would like to trade. Stocks, Options, ETFs, Futures, or currencies?
Once you know these things then you should spend a lot of time looking for a successful trading doing EXACTLY what you want and do everything in your power and never give up to learn, master and live that lifestyle. Learning to trade is not cheap. You either lose a lot of money or spend a lot of money to fast track things… either way it’s going to cost you thousands of dollars.

Personally I do a hybrid with laser-beam focus. I focus on only one investment (SP500). And I have learned and created my own trading system so I can day trade, momentum trade and swing it. This give me total freedom as I can spend 20 minutes a day looking at the market to manage my swing trade if needed and then walk away. Or can be replying to emails and see a setup unfolding on the intraday chart and take a quick trade and pocket a few hundred bucks on a day trade.

Final question is about drawdowns. How do you handle them in your trading?

Drawdowns are simple really… Depending on the type of investment you are trading the percentage amount will vary. But the same rule should apply. You should have a maximum loss per trade set so that you never blow your account up. Hopefully your protective stop is set way before that level is ever reached but sometimes price moves beyond normal volatility levels.

My general rule is to never lose more than 1% of my account in a trade. So once I spot a setup and then calculate where my stop should be and figure out how much capital to put to work so that if my stop is hit I do not lose more than 1% of my trading account. Because I focus on the SP500 the volatility is low compared to trading individual stocks so moves in price as easy to digest and reduces fear/stress when in a position.

Chris, thank you very much for sharing your experience with us and our readers.
Best of luck on everything.

FuturesPortal.com Editorial

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Technical View of What’s Next for Precious Metals, Stocks & the Dollar

March 14, 2010
Last weeks price action unfolded just as we expected. Money poured into stocks with the focus being on small cap, banks and technology stocks. The fact that these sectors are showing strength while utilities, health care and consumer staples lag is a good sign that investors are once again taking risks in the market.

Because investors and traders are bullish on the stock market again the money flow into the safe havens like Gold and Silver decrease. I believe this is the reason stocks moved up last week while precious metals drifted lower.

Below are three charts (Dollar, Gold and Silver) showing what I think is most likely to happen in the coming week or two.

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US Dollar Index – Daily Chart

The US Dollar has put in a very nice bounce/rally since the low in November 2009. Last month the dollar finally reached a key resistance level of 81. I have been talking about this major resistance level since January as the Dollar would find it difficult to break above this level.

Take a look at the daily chart below. You can see a head & shoulders pattern and a neckline which appears to have broken late Friday afternoon. There is a strong chance we could see 78 reached which is the measured move down. If we get follow through selling this week then I would expect 78 to be touched within 5-10 days.

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GLD & SLV ETF Trading Charts

Precious metals have been moving very well for us recently. From looking at the charts using technical analysis we were able to catch the Feb. 5th low and also the Feb. 25th low on a several ETF’s.

As you can see from the GLD and SLV charts, both metals are now in an uptrend showing bullish chart patterns and trading at support. If we see the US Dollar break down next week then be ready to go long gold, silver and stocks.

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Precious Metals, Stocks and the Dollar Trading Conclusion:

As a technical analyst the above charts are pointing to higher prices in the coming day’s which is exciting for us all. BUT when things are this perfect looking we must be very cautious as the market has way to suck people into setups like this and spit them out a couple days later for a nasty loss.

Understanding how the market moves is crucial for avoiding and/or minimizing losses when trades go against us. That is why I continue to wait for my signature low risk setup before putting any money to work.

My focus is to take the least amount of trades possible each year, only focusing on the best of the best setups. My low risk setups require downside risk to be under 3% for the investment of choice when the broad market shows signs of strength, as well. I use several different types of analysis to confirm if a setup has a high probability of winning and those which do are the trades I take along with my subscribers.

It is very important to wait for the market to confirm a move higher before taking a position with this type of setup. The market could go either way quickly and jumping the gun is not a safe bet.

Get My Precious Metals and Index ETF Trading Alerts: www.TheGoldAndOilGuy.com

Chris Vermeulen

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How Much Higher for the Indices, Gold and the Dollar?

Last week was exciting as we saw stocks and gold close above the February highs which confirms we are in a new up trend. The question everyone is wondering is:
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How far will this market go before rolling over?

This is a tough question but we can get a good feeling about the risk and if it’s worth putting money to work or not at this point. Here are my quick points and thoughts about the stocks indexes at the current price (March 5th closing price).
• The market is extremely overbought on the hourly and daily charts. Buying here is just chasing prices around, and that is a net losing game.
• Small Cap stocks have been on fire making a new higher for the year. This is very bullish but again buying here carries too much risk because after such a sharp price appreciation, we can see it all be given back just as quick.
• Volume over the past three weeks has been below average and when I see higher prices on declining volume I expect prices to drop very quickly once the thrust upwards ends.
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Stock Market Indexes – 21 Trading Days
Here is a simple chart showing the past 21 trading sessions. It compares the Nasdaq, NYSE, Russell 2000, Dow Jones, SP500, and Amex indexes.

As you can see the Russell 2000 (small cap stocks) and Nasdaq (tech stocks) have been on fire the past couple weeks while the solid large cap stocks lag.

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Are The Small Caps Stocks Telling Us Something?
Its means investors and traders are confident enough to buy higher risk companies. This is good for the overall market because small cap stocks tend to lead the market in both up and down trends. What has me concerned is the low volume rally, which I don’t like.

One thing to note is that small cap stocks tend to do well during times when the US Dollar is rising. This is because they are not multinational dealing with currency exchange. So this small cap stock rally has me wondering if the US Dollar is about to continue its up trend or if investors really are comfortable with buying riskier stocks?

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GLD Gold ETF – Daily Chart
Gold gained some ground last week but the majority of the money seemed to flow into small cap stocks. But take a look at this bullish chart.

This is a text book bull flag pattern complete with and ABC retrace, trend line break, and reversal candle off of a support zone. I am bullish on gold long term but think we could see prices rise a couple percent from here but will trend sideways/down for the next 2-3 weeks to digest the recent move up.

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US Dollar Index – Weekly Chart
I have posted this chart several times in the past few months with 83 being a key resistance level. The dollar’s recent price action is very bullish and it is flagging just under this key resistance level. I feel the price is heading lower from here but only time will tell. A breakout to the upside will put a lot of pressure stocks and precious metals.

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Weekend Trading Conclusion:
Last weeks strong rally into the close will most likely carry over into Monday and possibly Tuesday. The reason being is simply because retail traders and investors (John Doe’s) get excited when they see higher prices, thus it attracts more money into the market.

In short, I feel the market is overbought. All indexes are trading at resistance other than the Russell 2K index, and volume is below average. I am going to wait and see how things unfold this week before thinking about getting committed to any more long positions. If anything I will be looking to short the market using the intraday charts for a quick trade. Again low volume rallies that are overbought tend to snap back very quick on an intraday time frame providing a 1-4 hour trade.

Get My Free Weekly Trading Reports:

Chris Vermeulen
www.TheTechnicalTraders.com

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Intraday & Swing Trading Gold and Stocks – How To Use Multiple Time Frames For Setups

A couple months ago I started providing more of my intraday charts in hopes to educate traders on current market conditions so they feel like they are “in the zone” for trading. It’s crucial to understand the intraday moves and volume levels if you want to be consistently profitable trader. It doesn’t matter whether you are day trading or swing trading, you must be following daily and intraday charts.

I have been getting a few subscribers asking me: “Why I jump around from time frame to time frame so much?”

It’s a great question as some days I’m using the 60 minute charts, another day the 2 hour chart, and another the daily chart etc… well I hope to answer this question within this education report.

Get My Free Trading Charts

Trading Time Frames & Their Characteristics

Length of Trades – The longer the time frame you are trading the longer the trade will last on average. For example, if you are swing trading using the daily chart most trades will last 2-20 days, but if you are trading the 60 minute chart, then a trade may only last a few hours. Knowing this allows you to be more or less active depending on the market conditions or the amount of time you are available to trade.

Risk Levels/Draw Downs – The longer the time frame the more potential risk/draw down you will have. For example, when trading the daily chart you may set your protective stop below the previous days low. Depending on the investment, that could be $1-$50 per share or contract. Now compare this to someone trading the 5 minute intraday chart playing volume breakouts to generate quick gains. This person’s risk/draw down may only be 5-50 cents per share or contract.

This is the main reason why short term intraday traders play with larger amounts of money. Simply because their risk is so much lower, they can put more on the line for quick profits. On the flip side, swing traders should be trading much smaller positions to compensate for the increased risk.

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Individual Personalities

Every trader sees the market in a completely different way because each of our brains process chart patterns and time frames differently. This is exactly what creates the market, everyone buy and selling at different times creating liquidity and the random chart movements.

The hardest part about trading in my opinion is figuring out what type of trading personality you have? It took me a few years to actually figure this out, but now I know exactly what type of trading strategies I’m good at and which time frames I prefer trading.

Myself, I like swing trading because it does not require a lot of time to follow the market, and trades last several days and sometimes weeks. But I also like to take advantage of the market when volatility rises and the market becomes choppy because this is when intraday trading becomes most profitable, in my opinion.

Personally I do not want to trade every day because it’s a ton of work and stressful. Rather, I prefer to sit back and cherry pick, only taking positions when I see a perfect setup. This way my win/loss ratio is very high, and I do not need to worry about finding trades every day or week.

Quick Note: When I am trading the intraday charts my focus is to find setups on the 60 minute, 2 hour, 4 hour an 8 hour charts. The reason behind this is that these longer intraday time frames provide very accurate trades and each trade lasts a few hours and sometimes a few days. Trading shorter time frames like the 5 minute chart is torture because you end up trading all day every day and to be honest that’s a lot of work and not fun at all.

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So here are some charts showing you how different time frames show you different patterns, insight and setups:

SP500 Mini Futures contract – Daily Chart
Looking at the past 7-8 days we don’t really see anything exciting to trade as far as chart patterns go. So we sit and wait for something to unfold in a few days if we are lucky.

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SP500 Mini Futures – 2 Hour Intraday Trading Chart
What do you see? WOW a big fat head and shoulders pattern which indicates we should see lower prices.

Traders should have been looking to go short when the price was trading at this resistance level and the 5 minute chart confirmed resistance with the long upper candle wicks (reversal candles) shown in the charts below.

Important Note: When entering this trade, we did not know for sure it was going to be a head & shoulders pattern, but there was a high probability of it happening because of the previous couple day’s price action.

Notice how the left shoulder rallied up and got slammed by sellers, then the next rally (the head) also got slammed by sellers. This price action is bearish as institutions, hedge funds etc… dump positions once they have attained their profit goals for certain investments.

The next rally (right shoulder) drifted up slowly to test the previous resistance level. But look at how the price moved higher…. It drifted higher, which is bearish.

So, if buyers were still in control then we would have seen the price shoot straight back to resistance on big volume then form a mini bull flag (drift sideways) as it digests the resistance level before moving higher. It’s this price action here that was screaming at me to go short.

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SP500 Mini – 60 Minute Intraday Trading Chart
The 60 minute chart helps me to clearly measure how much potential there is for this trade. If you understand technical analysis you will know how to calculate a measured move. It’s simple really.

Take the previous move and add it to the where you think the price is headed. I’ve shown it in the chart below.

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Trading Time Frames Conclusion:
Well there you have it. I hope this report answers some basic trading questions.

If you would like to learn and trade at the same time I will be launching a service where I provide all my personal trades and analysis for your to follow along in real-time. Members will receive all my intraday and swing trade alerts for indexes and commodities Futures allowing you to trade which ever vehicle you want whether it’s an ETF, Leveraged ETF, Futures Contract or CFD. This way your timing is accurate and you can trade which ever investment you are comfortable trading with.

There will be a 24/7 chat-room allowing us to trade around the clock when setups arise. Also, members can swap ideas, ask me questions, make new trading buddies etc… There is even a squawk box feature! When I talk everyone logged into the site can hear me for important news or trades alerts.

All trade alerts are instantly posted in the members area, chat-room and sent via email making it one of the most powerful trading services I have seen available online.

If you are interested please fill out the form to be notified for this service. It will have limited availability:

Get Notified Of Launch

Chris Vermeulen
http://www.TheTechnicalTraders.com/

Disclaimer: I currently do not have a position in the ES futures contract.

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Have Metals and Stocks Bottomed Yet?

Everyone is wondering if gold, silver and the indexes have bottomed after last week’s heavy selling. To put things into perspective there were over 30 sell orders for every 1 buy order at the NYSE. That is pure panic and to confirm extreme fear, several of my broker buddies said last week was crazy with clients demanding to liquidate their positions ASAP to be 100% in cash.

This type of sentiment and price movement warns us of a possible market bottom. I am getting the feeling that traders and investors have been expecting this sharp drop I don’t see or feel a large amount of fear in the marketplace. Last Thursday and Friday war crazy but I think we need one more drop to really shake things up before a bottom is set.

Below are some charts showing where the market currently stands and what the charts are pointing to.

GLD Gold ETF Trading – Daily Chart

Gold is clearly trending down on the daily chart. One more thrust down should shake things up enough to trigger the next rally.

SLV Silver ETF Trading – Daily Chart

Silver has formed a Head & Shoulders pattern and has broken through multiple support levels. A measured move to the down side would be $14 for silver which could happen in the coming days.

SP500, NYSE, GOLD Futures, US Dollar Index – Intraday Charts

These charts clearly show the price action of the past month. As you can see the trend of stocks and gold are down with consolidations (pauses). This is the exact reason why you must trade with the trend and not do counter trend trades. Bounces are more like sideway movements making it very difficult to try and play bounces in a down trend.

If you focus on selling at key resistance levels then moves tend to be much more profitable. That being said, we did go long last Friday because of the extreme oversold market level. I was expecting a follow through Monday or Tuesday which has yet to happen. We have now moved our stops to break even or better to eliminate our down side risk.

Spot Gold 24Hr Trading Chart

This chart says it all. The market and gold is very volatile making it difficult to trade right now. Bulls and bears are battling it out. Only time will tell!

Stocks & Commodity Trading Conclusion:

In short, it’s been a slow week without any real exciting moves. Thursday and Friday could be interesting if traders exit their positions going into the long weekend in order to protect themselves from any surprise economic news.

From the looks of gold, silver and the indexes I sense selling could be just around the corner. We are currently long a few positions with our stops are break even or better in hopes for a pop and rally going into the holiday weekend but only time will tell.

My wife and I have our first child due on Saturday so I may disappear for 1-2 days in the coming week as we welcome our little princess into this new and exciting world.

If you would like to receive my trading reports directly to your inbox please visit my website at:

Chris Vermeulen
www.TheGoldAndOilGuy.com

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How to Trade IntraDay Gold and SP500

Last week was an incredible week for trading the intraday charts. With rising volume and volatility prices began to move up or down for extended periods of time allowing traders to profit from these powerful short term price swings.

During times like these traders using the daily charts for their guide found the market very difficult to time because of the whipsaw action each day. In this case, it is definitely best to stay clear of the market until the dust settles. But for a trader who watches the intraday charts, this is when serious money is made on a daily and consistent basis.

Most traders avoid using intraday charts because they either:

1. Think it’s day trading and do not want to sit in front of the computer all day
2. Do not understand how to trade in these “intraday” time frames.

Intraday trading is one of the most over looked yet most profitable trading strategies, in my opinion. One of the reasons I like/love it so much is the fact that it provides high probability setups on a weekly basis and trades generally last 2 -36 hours. Also, this strategy carries very low risk simply because you are in cash most of the time, putting your money to work only when high probability setups form.

If you are an active trader you should have been making money hand over fist last week. Below are close up shots of my charts:

My eSignal Trading Platform

This is my main trading screen which allows me to see the entire market. This, to me, is like a dashboard of an airplane. Each mini intraday chart is like a gauge hinting to what the plane in doing (horizon indicator, fuel, air speed etc.) My custom dashboards quickly allow me know if the market is heading up or down, what speed it is moving measured by volume and momentum, and if all pistons are firing which sector is really moving.

My Custom Dashboard

Quotes for every index and sector
Top Row: 60 minute charts with volume of: DIA, SPY, QQQQ and NYSE
Second Row: 60 min chart of NYSE TRIN, NYSE Adv/Dec, 60min Gold, 60min Oil
Bottom Row: 120 minute chart of the US Dollar, Interactive Brokers Trade Window

In short, I can see waves of money flowing in and out of each sector. These views give me a strong sense as to the strength of momentum. From these observations I determine whether the setup is favorable for shorting into light volume rallies, shorting into resistance levels or buying oversold sell offs in up trends.

Also, the chart patterns on the 60, 240 and 480 minutes charts are so powerful and accurate that you only need 2-3 trades a week in order to make decent money.

I would like to note that I do have 4 larger charts with different time frames allowing me to really get a feel for a trade before I commit money. These charts are Weekly, Daily, 240 minute and the 60 minute chart.

If you want to see some exciting daily charts of gold, sp500, oil and silver check out my weekend report: http://www.thegoldandoilguy.com/articles/gold-sp500-psychology-they-bail-we-buy/

SP500 Day Trading Futures Signal – 30 Minute Chart

The SP500 ES mini contract, or you could have traded the SPY exchange traded fund, provided an excellent intraday short trade last Wednesday.

All the indexes (NYSE, NASDAQ, SP500, DOW) drifted higher on light volume. While you can play the long side of these low volume rallies I prefer to stay in cash and wait for another short setup. Trading with the short term trend (240, 480minute charts) is crucial. Counter trend plays tend to be weak and short lived.

In short, the SP500 drifted into a resistance level on light volume and the NYSE TRIN indicator was rising in a very strong way. The combined information of price, volume and the TRIN indicator were screaming – short the market.

When the TRIN is above 1.00 it means the majority of the trades being executed on high volume NYSE stocks are sell orders. You don’t see the TRIN rise this high without the market selling off as it did on Feb 3rd. But when it does, Bombs Away – time to go short!

The next day the index crashed with panic selling across the board. The NYSE had over 30 sell orders for every 1 buy order. Now that is panic selling and, coincidentally, exactly as has happened at each bottom formed throughout 2009.

Intraday Trading SP500 – 60 Minute Chart

This chart clearly shows the high probability setup which took a few days to form. A short position was taken during the small bear flag pattern. My short position was covered on the break of a new high formed on heavy buying volume.

Intraday Trading Gold Futures – 120 Minute Chart

Gold had virtually the same setup as the SP500.

Intraday Trading Gold & SP500 Futures or ETF’s Conclusion:

As you can see intraday trading is nothing like what most people think it is. Trading using the 60, 240 and 480 minute charts really opens one’s eyes, allowing a panoramic view of the price action the market has to offer.

As most of you know, my goal is to trade low-risk, high-probability setups. And, the less time my money has to be in the market, the better.

If you are interested in getting more Intraday Analysis and Setups for ETF’s, futures and CFD’s be sure to join my free newsletter for Trading Futures and ETF’s:

Chris Vermeulen
www.TheTechnicalTraders.com