In my June 22nd article for Traderplanet, I mention a top was pending and that hasn’t changed. Greece has been the primary reason for these wild market moves over the last few weeks and so far, if you took what you thought was going to happen and traded the exact opposite, you would have made a fortune.
Today, as I am writing this article (07/06/15) one with any common sense would think the indexes would be down 200-300 points, as the Greece No vote won over the weekend. The SPX futures did drop some 30 points when they began trading Sunday night, but they had made up almost all of those losses and some indexes are actually green (Russell 2000)
If you did the exact opposite of what you thought was going to happen, it was yet another winning trade. Why do we see this happen over and over again? Well the Greece news has been deemed important by the financial media and has been the headliner every day. The moves made in overnight trading are all computerized. These algorithms simply look for the headlines and in Nano seconds- start buying or selling based on what is was programed to read/trade.
These very fast moves are triggering stops in both directions, which are then exaggerating the moves-throwing sentiment from one extreme to the other in a very abnormal fashion. Once the sentiment gets to an extreme bullish or bearish level-the process starts all over again-just in the opposite direction.
You have to anticipate these moves to control your emotions and stop listening to the media. It is the only way to make money in this environment. The dates in the chart below were all given at least 1 week in advance and have totaled over 150 SPX points in just 2 weeks.
Tomorrow is yet another turn date and the next one is important-which we will give you for free. You have to know when to expect the turns and forget about the reasons why the markets reverse-it is important!