It’s Friday* and a day when many traders are considering how to deal with their positions over the weekend. How comfortable or uncomfortable are you going home with a position this weekend?
I consider the close on Friday to be the most important close of the week. It provides invaluable insight into what is going on in the markets as well as an easy way to analyze the market.
This is what I do, I write down the previous Friday’s close in the markets that I am interested in. For illustration purposes today I’m just going to include five markets. They are: S&P 500, Dow, NASDAQ, gold and crude oil.
Last week the closing numbers on Friday, July 9th were as follows:
S&P 500 — 1077.96 Today's 7/16 Trade Triangle Score (-80)
DOW — 10,198.03 Today's 7/16 Trade Triangle Score(-80)
NASDAQ — 2,196.45 Today's 7/16 Trade Triangle Score(-80)
Gold — 1,208.60 Today's 7/16 Trade Triangle Score(-70)
Crude Oil (AUG) — 76.12 Today's 7/16 Trade Triangle Score(-65)
If a major trend is in place, but the market on Friday is moving in the opposite direction, there could potentially be a reversal in the works for the coming week.
If one looks at our “Trade Triangle” scorecard, you will see that for the equity markets we are still showing a -80 for the S&P 500 the Dow and the NASDAQ.
Gold appears sharply lower than last Friday’s close in the spot market.
The Dollar index which at the time of this writing, is lower for the week at -70. Crude oil is lower for the week at -70.
I hope this helps you understand how the markets work and how important it is to watch how the markets close on Friday.
Have great weekend.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
*This post reflects market conditions as of noon EDT on Friday, July 16th, 2010
Before the weekend I took profits on a bullish EUR/USD position but most of my bearish positions are option spreads designed to be ridden out to their conclusion. The weakening up volume never made me fear a bull move.
elkojohn, Thanks for great comment. Iam fairly new to Market Club and do not, as of yet, know my way around the site as well as I would like. (yes I am taking classes and articles). I am a"swing trader", using a 2-10 day time frame. Would you consider sharing some of the technical indicators that I could research? I also think the Market Club is great both for honesty and info. Again thanks for great comment.....Pogo
This was options expiration week.
Last month the Market Makers held up the market until the options expired and then the market tanked.
I figured after that big drop in the 2nd half of June, they would do the same thing this month.
Wednesday at the 50-ma, I went short using TWM & SKF.
Thursday, I added some more shorts when the Market Makers pushed the market back up to the 1096 (S&P-500) at the end of the day.
Just like last month, on Friday, after the options expired, the market tanked.
I sold at the low of the end of the day for a nice profit.
Monday I expect a small bounce into today's range, at which time I will short again, but Mr. Market is unpredictable at times, so he could reverse, and go for the double top.
I expect the S&P to eventually test the 1010 level, so trading closer to that level will be tricky, but a higher low from that 1010 level will give me some head scratching.
I don't like to hold over the weekend because good news / bad news will effect the open for Monday.
I like to trade the swings from Monday to Friday during volatile periods, and stay neutral over the weekend with my profits from the week, so I can enjoy my weekend.
Through the Market Club offers, I found two great technical advisers for my style of trading, which is swing trading for 2-10 day periods.
One gives me good Elliott Wave patterns, the other gives me the put/call number that the Market Makers will need to hit on Option Expiration Friday to maximize their profits. The Trade Triangles give the the Market Direction, so for now, the odds favor Lower Highs and Lower Lows.
I consider Market Club to be the best educational service on the internet.
All the educational material in the library has improved my trading ability immensely. I am now looking at one more offer from Market Club to improve my skills even more. Thank you very much Adam for your commitment to help others learn how to understand and profit from trading, and for creating such a valuable website and resource for us small traders.
John,
You are more than welcome. I really want you to know that I appreciate your positive feedback.
Continued ongoing success in the future.
Adam
In a market that is dominated by high frequency & algorithymic trading controlled by Goldman, Morgan, BoA, etc operating with unlimited amounts of free money courtesy of their lackies at the Fed and Treasury they can and will make the market go in any direction at any time.
The mystery 250 point Dow rally this week is just another example of that they are in control.
T/A gives a good picture of what was, but since everyone can see it, just like in no-limit poker, those with the biggest wallet can wipe out the smaller players in one hand.
Just like the Euro doing a 180 from 1.19 to 1.30 in under 10 days. Even Dennis Gartman got burned on this one.
Big money controls everything.
I now don't hold anything overnight.
I'm short over the weekend. Thanks for the great service.
This article definitely gives a great insight about the markets.. whether they will continue in existing trend or are showing indications of reversal.
I will start doing this exercise every weekend for sure.
Thanks,
Manisha
Adam,
Greeting from Thailand.
Great posting. I could not agree with you more. I think that what we did experience so far in the indices was a bear market rally and the new RED signals today seems to confirm what you thought. Am definitely bearish as far as the indices are concerned ..
Have a great weekend.
Loic