Good evening traders,
The Market continues to be stuck in the same range as the last two days. All major support and resistance lines are still in play. In last night's post I mentioned that the market could fall to the 1075-1076 area if 1084 support was broken and that was exactly what happened. The Philadelphia fed survey came in way below expectations and buyers pulled the plug.
I started stalking a long when we neared support. As you can see on the following chart I was a little too early on the first entry but all was well in the end. The stochastic formed a divergence and when the sine wave painted blue support I pulled the trigger. The trade ran for the full two points but I only got 7 ticks. Anxiety was my downfall today if you couldn't tell !
One of the most important things about being successful in the market is proper money management. I only ever risk one point on my trades and I look for a target of two points. This is great because you can be wrong 50% of the time and still make $$$ !
Going into tomorrow I'm going to be very cautious. In fact I doubt I will trade at all. CPI is at 8:30am EST and you never know how the market is going to take the news. We closed pretty much unchanged on the day. It seems like the big money wants to see the numbers tomorrow before they put on a position. Volume has been fairly light all week, but it is summer. After CPI is released the big boys will be headed to the Hamptons and the market will likely chop around the rest of the afternoon. If you have to trade tomorrow just be careful not to over-trade. Get your money and get out. Good luck everyone
-Nate
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