Today Post::SPX 20/50-DAY TRAP

Long before the SPX formed the 20/50-trap, most stocks formed what I call the “20/50-day churn” which is essentially the same thing except that we do not know if the SPX will churn. The only way to tell is if a lower high is made, and that is yet to be seen.

The trap is basically when a stock or the market tests the 50-day and then test the 20-day MA’s, creating the possibility of continued narrow-ranged consolidation. The trap the turns into the churn if the range cannot be broken in it’s entirety.

In the case of the SPX, a churn is bearish as it cannot form a higher high. If the SPX can bust through the 20-day and flag, it is likely going to make the attempt to test the high of the rally. I am and have remained mostly neutral on my stand on market direction.

On the char below marks the 20/50-day MA’s. Also noe that we are forming an ascending broadening wedge within a larger rising wedge. In the first two corrections, the market was able to successfully bounce without the need for the 50-day. The past correction in the beginning of Oct required the 50-day. This correction needed further room lower. Make note of this trend as a mark of weakness.

I am still looking at my standard names such as AIG, but am also looking at CAR, NANO, NVTL, CROX, DAN, PVTB, CNXT for major reversals/continuations. I will mark trades if I take them.That is, if I make to campus before the open.

Today Post::KEEPING EYE ON THE RUSSELL 2K AND THE TRANSPORTS

Watch both closely over the next several days.

Today Post::A LESSON ON CONCENTRATION

Thomas Edison was asked how he was able to accomplish so much with his time. He said, “It’s simple. You and I both have eighteen hours a day in which to do as we choose. You spend the eighteen hours doing a number of unrelated things. I spend it doing just one thing, and some of my work is bound to amount to something.”

If you want to be successful in any field, there is one rule to observe: concentrate your efforts. Get one thing in your mind. Learn to ignore all the distractions and temptations along the way. Then, put all the power you have into forward motion.

If you’ve read Ralph Waldo Emerson, you’ll know that he wrote two essays that apply to success, one titled “Power” and the other titled “Wealth”. The main theme in each is concentration. Emerson said, “Stop all miscellaneous activities. Do away with distractions, other duties, property cares, chores, errands, diverting talents and flatteries-all are impossible.” And he said elsewhere, “The one prudence in life is concentration. The one evil is dissipation.”

Can you concentrate on one goal when you aren’t quite sure what that goal is? Can you move forward firmly and decisively on one road without constantly looking elsewhere to see what’s going on? People who know how to concentrate put all their effort into their projects, continually improving their ability to succeed.

Dissipation is the opposite. A person who dissipates is like an archer who tries to shoot several arrows at once: the arrows move with dissipated force and rarely ever hit the target (unless you’re Robin Hood, maybe). People who dissipate jump from one thing to another, neither improving their abilities nor moving forward toward success.

How does this apply to trading? This can apply several ways. The most obvious is if you quit your job to trade, then find that trading might not be for you, so then you move onto something else and beyond. Perhaps your efforts in trading were not concentrated. How about continually trying to find the “holy grail”? We heard this term used so often, but surprisingly, many traders are still looking for it! Stop moving from one thing to another and concentrate your efforts in improving your core skills.

Let’s take the case of two brain surgeons with equal prospects of success. One puts all his efforts into his work and all of his money into a relatively safe investment to ensure longer-term financial success. The other doctor tries to play the stock market and practice medicine on the side (or vice versa). Ultimately, the second doctor’s practice suffers when the market goes up and his money when it’s going down (provided that he’s just another retail loser). How would you like to have brain surgery performed on you by a doctor who had just lost $100,000 in the stock market?

The point is, trying to diversify too widely will always detract from your success.”Where you believe the treasure is, there will your heart be also.” That is an immutable law. Can you then be a success if your heart is in three different places - or five or a dozen? No, of course not. I am having this struggle right now as I am juggling so many things at once such as my course work, fund, real estate, internet stuff like iBC and Stocktwits, and much more.

Whatever you choose to spend your time on, spend it well. Whatever your goals are, make sure they are unified. Only a person who specializes becomes truly successful these days. Word?

Today Post::STOCKTWITS.TV SHOW #3 CHARTS

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