Market Trend Analayis and the Traders Whiteboard Cont....

Good morning! It's Saturday and I have a 9:00 a.m. appointment with a trainer. Ever since I turned 40 it's like the warranty expired. I used to cruise into the gym, lift a little weight, jump on a stair climber, and I was good to go. Now I pay some young in-shape guy to inflict pain on me, and still slowly lose the battle.

I feel a little like Friday's market...

Friday morning, we opened up. In fact, the NASDAQ gapped up and advanced 1% during the first hour. It just wasn't meant to be, though.

All of the major indexes closed lower for the day.


We're still in a rally, but this market needs to get some momentum going if its going to break out of its current bearish trend. I haven't seen that momentum yet, and today I'm feeling pretty good about that call premium I sold.

But, hey! The guys on CNBC were saying yesterday that the bottom is here... Did you notice that red trade triangle come in there Thursday on the S&P 500? Could this downward trend continue?

Look back on the posts a few days. I posted a chart with Fibonacci levels, and surmised that 1,170 was not out of the question. Yeah, we've got to be questioning whether the bottom is really here.

Don't get me wrong... I don't mean to be negative, but my money is on the line here so I do want to be realistic and pay attention to the probabilities. Just spend some time thinking about what it would mean for you if we go to 1,170 and have a plan in place if that happens...

I spend a lot of time emphasizing why we all need to have some form of trading and investing plan. If you listen to CNBC for your guidance, you'll be buying the wrong stuff and the wrong time. You need some thing more objective.

That's one very big reason why I'm a fan of Bill Poulos' new course. It's objective. It's rule based. It filters out all of the noise and just focuses on what's actually happening in the market, identifying a trend, finding a safe point of entry, and then applying an effective money management discipline. Check out the review of ETF Profit Driver if you need more info on that.

So, with the idea of making ourselves more disciplined, more sophisticated traders, it is time for our 6th Traders Whiteboard lesson.

Now, if you've missed any of these just scroll back through the blog posts and you'll find the prior five. Those videos are still up, and each of them is just a few minutes long.

In this 6th lesson, we get into the interplay between fundamental and technical analysis. The whole video is a little under 7 minutes in duration, but it touches upon a couple key concepts so it's time well spent.

Come back tomorrow and I'll have a seventh trading lesson for you...

Have a good weekend!

Christopher Smith
TheOptionClub.com