Stock Market Technical Analysis For 07-23-10

http://www.guerillastocktrading.com/stock-trading/the-black-art-of-trend-trading Institutional traders have targeted trade the trend investors like us. With cold, evil, fashion, Institutional stock traders are selling into the up swings and covering shorts into the down swings to compact the swing range too narrow for most of us. This has created both to the upside and to the downside over the previous week.

What has spooked bears like myself is that a certified higher low is now in place with confirmation on today's chart.

Like I wrote about last week, the life cycle of the previous downtrend channel has completed. We are now in nomad territory where a different channel is being formed. We do not have enough information yet to determine if we are going into a sideways trading channel, or an uptrend channel.

When there is no clear trend, then what must trade the trend traders do? Walk to the sidelines and the protection of cash.

At present we have been in cash two times over the past several weeks and when we thought a new trend had been established making us jump back in, it turns out we were head faked and murdered. I do not know about you but I'm weary of getting my butt kicked by the better prepared and armed Institutional traders.

Someday we might have a Traders Bill Of Rights where the battlefield is made just, but for now, inequalities continue to exist amid professional and amateur traders such as Institutional traders have access to all limit orders, they have direct access to market makers and can make non-open market trades, they have access to a faster stock data feed and can use high frequency trading schemes against us, and they use the news organizations to manipulate public opinion about a company or the economy as a whole.

Something that is also key is that on the daily chart of SPY, bulls have re-taken the 50 day MA however we still need confirmation of the break.

The mistake I made was jumping back in this stock market twice now and being incorrect both times. This suggests that I ought to raise the bar for what I view to be a new trend forming. This means that I ought to find more bullish or bearish indicators on the charts than I have in the past. Even a Bearish Head and Shoulders Top and a Burial Cross was not sufficient to place my money on the short side. Not even a Bullish Downtrend Channel break was sufficient to put my money on the long side. All these technical indicators have meant little over the last several weeks. The only thing that these technical indicators have done is to entice us trade the trend traders from off the sidelines and into a trap where we have been slaughtered by the thousands.

Category:

Education

Tags:

• tradethetrend
• stocktrading
• daytrading

[ZotMalakhov]

Thank you a lot for sharing your nice video! :))