lately I have seen many posts about following the pros and the smart money. not an easy task. when there's big activity, it's more than likely that pros are on both sides (buyer and seller). and not to forget there are different kind of pros, like the speculators and the hedgers. both can produce high volume, but with different objectives. another problem is how do they execute their orders. do they have resting orders or do they hit bid and ask. the answer is likely both.
one thing I feel pretty much useless is watching the DOM. you see a big block on the offer, conclusion the market is going to drop because there's a big seller. all the sudden that block is gone and the market moves higher. a very old trick, but still works. watching time and sales on the other hand will show you very important information. but I'm getting tired doing that for a long time.
so I prefer to watch the entire volume:
- how much volume did it take for a certain range.
- increased volume can indicate reversal points.
- volume based MA's can show S / R lines.
This is rolling value area indicator thus you always know whether it is under/over value at any time. Well, that is the theory behind it anyway.
by sbgtrading #28 http://www.ninjatrader-support2.com/vb/showthread.php?t=4466&page=2
The following user says Thank You to Silvester17 for this post:
thanks ........... i have volume sum on ZigZag indicator....basically it sums the volume of all the bars in the run......I think attaching volume accumulation to some sort of oscillator would give volume info sooner.......
we didn't quite get to the 1220 area (yet), thanks to goldman sachs. but I would be very careful about shorting the market here. the up move is still intact and it looks like we are finding support again (like it did so many times in the past). a drop below 1180 could change my opinion. it reminds me a little of the dubai "crash". everybody thought that's it, we are going down, but in fact it was a golden opportunity to get long again.
so the question is, what will the professionals do?
I don't know, but I have the feeling many traders are bearish for a long time and now they finally can smell something, just like jeff clark who showed us the scariest chart of the week. (thank you for the link).
I especially like this phrase:
"I warned you about this pattern ( here and here) as it was developing. When the market finally broke down, it wiped out four months of gains in just a few days. "
unfortunately he forgot to mention that it didn't take long at all to get right back up there again.
nice action today. but what is the next target? another leg down, or a rebound? normally that kind of news would be a terrific buying opportunity. the day greece and portugal entered the eu, you knew there could be trouble. so that shouldn't be a big surprise.
since we reached more or less the mentioned 1220 area (think 1217 was high), I would take a neutral position for now. from a technical view it looks pretty bearish. from a fundamental view still very bullish.
who knows, maybe the fed has some interesting news on wednesday.
I've followed Jeff Clark's market view for some time and he seems pretty accurate with his market analysis ...... (post #16) ....... now, let's wait for our think tank to come up with some awesome reason why this correction occurred ..... oh, wait a second, they already did .... it is a trader error ...... wooooow ......
Of course it wasn't. That rumour started the rounds within 30 minutes of the crash, how would anyone have known by that time. In anycase it was reported to be Citigroup who made the error and they have denied it and investigations have also not found any such error or out of the ordenary trading.
Now the new excuse is 'computer glitch' and they are investigating what the glitch may have been. So it's now a computer glitch, but they don't know what glitch it was. Sounds like the 'glitch' of panicing robots to me. Or maybe it was a some just a bunch of fat cat bankers all shorting the hell out of the market while they knew it was vunerable.
It's just spin to try to put confidence into the market that the bubble didn't burst. 95% of traders know its spin, but it dosn't stop it from becoming the headline that the average person / investor sees on the news ' Computer Glitch Causes Crash', 'Dumb thumbs cause crash' etc etc.
Hmm.. well as the Retirement Account goes.. by the time you need that gold, the gobs of cash in those safes will only be useful as wallpaper and you will undoubtedly need every one of those guns and more when the starving hordes find out you have that gold.
My guess is that before it all gets to that.. our government in its "infinite wisdom" (yes, a total crock) will once again confiscate our gold should the time ever come for us to depend upon it for our economic survival.
Long before any of that comes into play, our Government will pass a VAT tax to temporarily assure a kitty to support their profligate spending habits, they will institute new "means" tests that will exclude all but the very poorest seniors from drawing upon their Social Security and/or Medicare benefits and they will effectively steal the $15 trillion of our retirement balances in 401k and IRA accts., etc. via new Government Annuities, as they strip all other competing retirement investments of their tax deferral status to assure conversion into their government coffers.
It's going to be one long and rocky road from here to there and frankly, life as a trader, despite the lack of fair or level market access by all participants, is still quite enjoyable in comparison.
This has just been a needed correction. My bro in law had already taken leave of his senses on risk and was mad in march that he was "only" up 5% in the first quarter after the huge gains a monkey could have made in 09.
10k DOW will be another gift from the risk gods for all our long term accounts.
approaching flash crash level (1056). going to be another interesting day. the conditions are almost too perfect for a real bloodbath. I think volatility might not be a problem today. happy friday.
The following user says Thank You to Silvester17 for this post:
right about the open of RTH market dipped below the flash crash level. but didn't spend any time at all and got rejected. followed by a huge run up. another positive sign was the strong up move into the close. those two factors are normally bullish signs. but for me the outlook remains uncertain.
when I started this thread I was hoping someone would make a certain statement. well it never happened. but I found the statement I was looking for in another forum:
"Most people are influenced by others way too easily
Can you just see the idiots, sitting at their little desks, with their Bloomberg Terminal, and the latest streaming news, changing every fraction of a second
They are all a bunch of Dumb Ass Traders, and, if you think that any of them are going to show you how to make some real good money trading, with your own accounts, then FORGET IT
They are like the production line, little robots sitting there and hitting little buttons when they see what they have been shown to see
You need to get this so-called "Professional Trader" status out of your mind, for, there is no such thing, for, the majority are just like trained little puppies that do EXACTLY what they are told, and long may they continue
And, I AM VERY SERIOUS, no kiddin"
I can only say bravo. you would be surprised how many professional traders actually lose money. of course there are some with huge profits, but they have something you don't have. it's called "FRONT RUNNING" and or "Connections". yes trading is that easy.
You can keep track of primo with PRSP.Z, which represents the cash price of the S&P 500 Index subtracted from the price of the nearby S&P futures contract.
The following user says Thank You to tigertrader for this post:
If you're looking for a more fundamental approach, theres always the Commitment of Traders report that comes out every week. Its utility all depends on your time horizon. I like to look at it so i can understand what certain types of traders are doing, especially for agricultural products.
