Today Post::INDEX UPDATE: NEUTRAL-BEARISH

Currently neutral-bearish. My sentiment has not changed and I believe the correction may take a while, but that’s just my thoughts. What are we looking for?

SPX - The 20-day MA test continues with a possible H&S pattern developing. The criteria is that a lower high is produced on the daily which is TBD.

DJIA - Possible ascending triangle still developing.Out of all the indices, if we do continue with the rally, the DJIA should be the first to break to new highs.

COMP - Currently the most neutral out of all the indices. Between the 20/50-day MA’s. Will be neutral for several days. Possible channels are drawn out.

RUT - Still the weakest of all.Broke an ascending triangle and now flagging. The 20-day MA has crossed below the 50-day MA and may be used as future resistance. Look for further consolidation.

BKX - Weakest sector is the banking index. Forming a bear flag. The market will have difficulty if the financials do not rally. Pretty obvious, right? Watch them carefully.

All of this is where the neutral-bearish stance comes. When you trade, never forget to look for the high probability setups. I am playing them daily, and winning daily. The better the intra-day and/or daily setup, the better odds you have at success. Don’t just “play anything” or people like me will take your money.

Don’t complain about my wins. If you aren’t winning, then you’re doing something wrong. Figure out what you’re doing wrong, fix it, and start winning with me.

Today Post::BEARISH / THE TRLG TRADE

Yesterday’s big trades were in TRLG for me. It wasn’t like the day before where I absolutely killed it, but nonetheless, I managed to hit TRLG twice and profit twice. The diagram of trades taken is pictured below. The green squares are short entry points and the orange squares are scaled out exit points. I “missed” two trades, but only because the volume wasn’t there and also because the 2nd “miss” was right after the FOMC decision. Execution was near perfect on this, so study it.

Moving onto the general market, I am bearish as the title of the post suggests. We formed a gravestone doji on the SPX, shooting star on the DJIA, and a dark cloud cover on the RUT. All three are bearish signals. In addition, note how the indices are “churning” at their respective MA’s. If you watch my shows on Stocktwits TV, you would know that I consider this move mostly bearish. The last chart is the IWM, the Russell 2000 iShares ETF. Note the massive sell off volume. The RUT did and will continue to lead the way.

Today Post::MORNING THOUGHTS (UPDATED WITH FSYS TRADE)

Yesterday’s best trades were in WFMI and FSYS. I am nearing a 20% total portfolio gain for just this week alone and the week isn’t even over yet. If you don’t believe me, then obviously you’re a nOOb reader in the CA Trading Room. I am the one and only Chart Addict and my returns are far superior than yours. Stick around for a while and you might learn something.

Yesterday’s call on the general market was very wrong, and I don’t care. I don’t even trade the general market. It’s such a beautiful thing when your predictions are wrong, yet you still make a +6% total portfolio gain. Hope that’s a lesson in playing only the best and highest probability trades, regardless of overall direction.

I have to see how this next leg turns out. I estimate that it will be another week before a IT determination can be made. Always keep an open mind and never let your opinions get in the way of great opportunities. You are your own worst enemy. Never forget the POWER OF CHARTS.

I have no idea where we are going in the markets, but I guarantee you that I will win again today - that would make every single day of this week a win. Watch and learn, folks.

Here was the FSYS trade yesterday. All documented on my Chart Addict blog and on my twitter in real time:

Today Post::FOMC DAY / SPX in DESCENDING CHANNEL + FLAG

Thanks to everyone that watched the show last night. If you couldn’t, it’s in the Stocktwits.tv archives.

I am undecided on direction for today simply because we have the FOMC announcement today at 2:15PM. I don’t suggest trading prior to that announcement (if you are trading the indices). I suggest careful and decisive trading based on the reaction. The full reaction should take 30-45 minutes.

The SPX is in a downward channel. As the day progresses, note that we are near dual resistance levels (on the 10-day chart). We are forming a flag that is most clearly visible on the multi-month daily chart.