A professional trader always has a view of the broader market based upon technical beyond the media or bias of other traders. You know your one step closer to being a professional when you stop reading the headlines and just trade the charts. It’s always good to see the forest than the trees; knowing the bigger picture will help you sleep better at night.
MEDIA IS A TOOL FOR TRADERS
I have been day trading full time since 2006 and rode the markets up into the highs and rode them down in 2008. With bearishness abounding and Cramer on CNBC saying in March 2009 that he wouldn’t put any money to work in the markets at this point I knew a bottom was near. The media is a tool for the professional trader as it hits extremes.
CHARTS ARE YOUR BEST FRIEND
But sticking to the charts will always be your best friend in trading period. The market is always hunting for supply and demand.
STOCK MARKET ACTION
Once the SPDR S&P 500 ETF Trust (SPY) broke through monthly supply at 155.00 and pushed past it, that prior supply would be expected to become new demand and support on a pullback.
The SPY had five months of solid gains and in June because of FOMC speculations of tapering, the SPY had its first pullback month but it held the 155.00 area of new demand.
BOTTOM LINE
As long as the SPY stays above 155.00 and continues to back and fill it should see higher prices into the year. 155.00 is the key demand area to keep your eye on. The SPY has no negative price resistance to the left over the 169.00 area.
DON’T TRY TO PREDICT THE CRASH
Stay objective and try to stay neutral on your views as a trader. Don’t get caught up in trying to predict the crash of the stock market. As it stands at this moment the SPY is in a mighty uptrend.
Go with the flow until it changes. Since 2009 to present the market is a graveyard of short traders in the long-term. People continually ask me what the market is going to do tomorrow or ask my viewpoint. I just respond and say I am happy if it opens tomorrow.
[What do you do so you can sleep better at night as a trader? Share a comment below.]
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Peterson’s live trading room won 1st place in the 2012 Star Awards. Learn more about his Gap Trading Room here.
