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

How To Set Stop Losses Trading Video

Warren Buffet's number one rule of investing is "don't lose money." His number two rule? Don't forget rule number 1...

Today's video provides an extremely important lesson about not losing money.


Adam Hewison covers three methods of using stop losses in this video. If you're trading without stops, it's probably because you're unsure about how to use set your exit points.

Take about 7 minutes and watch this video, which will review three methods for selecting exit points. Incorporating this lesson into your trading could be one of the best things you could do for your financial success this year...

Trade well.

Christopher Smith
TheOptionClub.com

Trading Trends With Technical Analysis

It is Easter Sunday, and time for our third chart analysis video.



This installment focuses on simplifying your analysis. It touches upon basic trend analysis and then reviews some basic studies such as MACD, Stochastics, and other oscillators. The goal is not so much to pick tops and bottoms, but to identifying emerging trends and then jump on board for a significant portion of the move.

These "bite size" educational videos are a quick way to brush up on the fundamentals of technical analysis. So, grab your favorite beverage, take a few minutes, sit back and enjoy this short video.

Happy Easter!

Christopher Smith
TheOptionClub.com

Learning Technical Analysis Basics - Part 2

Yesterday, I posted the first in a series of videos that focus upon technical analysis fundamentals and techniques.

Today, I'm posting the second video in the series which will cover some chart patterns. These are high probability patterns, that you can start incorporating into your chart analysis today.



So, take a few minutes today and watch this short video. It is just a few minutes long, so at worse it's a review of the fundamentals we all need to know.

Trade well, and be sure to check back tomorrow as I'll have the third video in the series up for you.

Christopher Smith
TheOptionClub.com

Portfolio Diversification Explained

Let's talk a little bit about portfolio diversification.

Too often we find ourselves opening multiple positions within our portfolio, all of which tend to rise and fall with the stock market. When the market is safely trending upward, we feel confident and secure in the construction of our portfolio. However, a marker correction, such as that we are experiencing, can shake our confidence as we watch our account equity shrink with falling stock prices.

One of the concepts then we will want to incorporate into our financial planning is that of a portfolio diversification. This comes in many forms, but generally requires diversification among both markets and individual market sectors.

Portfolio Diversification Video

Utilize the link above to access a recent video on the subject of portfolio diversification. This video is the first in a series and I will follow-up with subsequent videos here on my blog.

Trade well!

Christopher Smith
TheOptionClub.com