Spot and Trade Institutional Money Moves

Algorithmic Trading with Human Interaction for:

Day Traders, Swing Traders, Long-Term Investors

Monday, June 28, 2010

What Do The World Stock Markets Tell Us?

Today we want to identify the market trend by comparing major world stock markets:

How do we read this and what does it tell us?

First, let us reduce the world to 4 key markets that have a lead indicator function (we take those by the order above):

• Japan: down week and overall down 7.7% to last year – continued economic crisis, we not considering until the Nikkei breaks a key level of support or resistance.

• China: up week but still down 22.1% to last year. Not yet at par in evaluation and overinvestment does not give us a good market read.

• Germany: down week and up 1.9% to last year. Interesting that one of the world export leaders for industrial goods is still up while other markets are down.

• United States (S&P 500): down week, and down by 3.4% to last year.

We will follow the development of the DAX closely to see where it might take us in the upcoming week. Within Germany being 6 hours ahead to New York, we found our guide for next week. Interesting to note that Mexico and Canada (both depending on Oil and Industrial Production) show a more positive trend than the US. .

Considering the German, Mexican, Canadian Stock market development compared to the US, we assume for the US a potential for a slight market upturn in the upcoming week, but decide if we want to be bullish by our market indicators.

“It is not us to tell the market where it is going, it is the market who takes us where we want to be.”

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Sunday, June 27, 2010

Is It Trading Time?

This is a key question for either the day trader or the investor who wants to enter longer term into a position. Let us share two time of the day trading strategies we follow at NeverLossTrading:

1. Stay Out of the Market at Key Market Events

Huge waves of volatility (price up and downs) shake up the financial markets at that point in time and if we do not want to take a gamble with a huge risk, we stay on the sidelines for at least 5 minutes and after a new trend is build or the prior trend is confirmed we enter the desired position.

Key market Events for the week of July 28 are (key market shakers are highlighted in bold and red):

2. Consider Key Times of the Day for Trading

The most important as a trader/investor in the financial markets is to stay flexible and adopt to the market. Every preconceived strategy is as good as flexible we are to adjust it – and the financial markets will ask us constantly to do so. To be successful here is a hint of what times of the day key price action can be or not be assumed:

- At 9:30 EST the market takes a direction.

- At 9:35 EST this gets either confirmed or changed.

- 9:35 to 10:00 EST a lot of volatility usually lets the market bounce around. Often the markets makes its move for the day in this timeframe.

- 12:00 to 13:00 EST difficult to trade: choppy market, trades systems get out of control, but sometimes not and the major move of the day occurs.

- 13:00 – 14:00 EST the prior market direction gets confirmed or reverted. More often than not, markets have a bullish versus a bearish sentiment.

- 15:30 the wild time of the day, when we catch the right direction, big money can be made quick.

3. How to Apply Flexibility in the Investing/Trading Strategy

We recommend to rely more on technical than on fundamental analysis of the market. Let the price and your indicators tell you where to move to and not some complicated market assumptions that might be interpreted in a different way and manner.

Build yourself a reliable technical indicator based trading system or rely the proven NeverLossTrading.