Swinging From Both Sides
News can work two ways for traders, for you — or
against you. When you know
how to use a broad perspective to piece things together, you can make it work
for you.
09:54:53
Intraday Setup Alert
The e-mini S&P futures (ESZ2)
are breaking down to a new intraday low out of a counter trend rally. ESZ2
is down 18.25 to 807.00.
In the first half hour of the session Monday, all the news coming out had
been negative. Europe’s market was weak today, Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating) warned,
General Electric
(
GE |
Quote |
Chart |
News |
PowerRating) cut estimates and Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) was scrutinized by
a bearish column in Sunday’s New York Times. When the counter trend rally fails,
that is the time to pounce on a downside move that is good for 7 points.
Remember however, that news can also lead to extreme reactions
that are prone to reversals, particularly when it stretches price to a key
level.
10:37:12
Intraday Setup Alert
The e-mini S&P futures (ESZ2)
are now triggering out of a 1-2-3 bottom at the 2.0 volatility band on the
intraday chart. ESZ2 is down 22.50 at 802.75.
The reversal sent the contract up for another 7-point move, this
time to the long side. Depending on how you utilize trailing stops, you may have
even got a few more points after locking in profits.
While you don’t have to trade both
ways, it allows you to take
advantage of more opportunities. If you quit after the open, great. The day was
still a success based on the first move down. Being able to discern action based
on the news, however, allows you to catch both the emotional play on the open
and the key reversal as the pros come in and “buy the fear.” When you learn to
get in the heads of the big guys, you should find good trades in any market
environment.
Until tomorrow,