Financial Widgets | Bang! Bang! - Trend End, Friend

If you're really interested making money in the stock market then you have already learned to make a profit when the market goes up and… when the market goes down. Now check this out:

Identifying a turning point in a trend can make or break your trading profits for the entire time it takes a trend to complete. It makes trading easier and investing possible. It is the lowest-risk entry point anyone can identify. This one skill can make or break a trader's career and has. Today was that day!

Today was a stellar day for traders. But not just traders. Anyone the watches the market, Financial Widgets readers included, should have noticed that today didn't act like a recent "normal" day. I have written about the change of trend since April 15th. My May 5th post pointed out that indicators I watch showed May 6th was inevitable. Yesterday's post told of today's drop as a warning to (sell short – something I wouldn't do)/ buy puts (the recommended route) today as a swing trade.

I noticed today that there was some "smart money" buying long today but the method of their trades indicated to me that they were only buying for the very short term. What was on their mind? Otherwise known as a "dead cat bounce", this chart pattern comes about right after a severe drop. We've seen one on May 6th and another set up today for continuation tomorrow.

These things occur naturally in a normal market. They are more normal that the stock market has been lately. High-frequency traders (HTFs) and others such as the big investment banks and hedge funds that bet long on the market since March of '09 are going use this one to try to produce a melt-down, opposite the "melt-up" that has happened since then. Even if the market is up tomorrow it's going down in the longer term. That is what I think was on their mind. They are using this expected dead-cat bounce as a way of getting out of their long positions and into short (read DOWN) positions.

You need to read the last 4 or 5 posts I produced starting April 15th and all the way up to BANG! from last night. The May 5th "flash crash" was the same type of turning point that Aug. 18th, 2008 produced. That point turned into a spectacular trading performance (up 8117.25% – not a misprint) in the "Trading To A Million" portfolio over the last 21 months. Today equates to Sept.2th, 2008 in the Q's. It's starting earlier and quicker this time around.

If you ever wanted to make big bucks now is the time. Sort through the "Trading To A Million" portfolio for the fly-over of it's start. Don't feel like I'm trying to convince you. I'm not even trying to sell you on the concept. Do it for yourself.

There are other factors that are coming into play that you might have noticed:

Political:

The government's willingness to legislate market reforms and the people's willingness to change government to get it.

Economic:

Unemployment, Housing, deflation, inflation, stagflation (remember the Carter era). Finance: National Debt, consumer debt.

News Cycles:

During any market rise When you have good news the market goes up. When you have bad news it's discounted and the market goes up. When the market flattens good or bad news produces no significant market change. During a downturn, any news whether good or bad is bad. The good new is discounted and the bad news makes the market go down.

*Among others, these things act as a market bubble that supports the market's positive upside until the news cycle changes. That has happened.

The Technical:

The Q's (QQQQ) ended at $44.35.

The 200day moving average (200SMA) is at $44.48 (Confirmation of a trend that began May 5th, DOWN)

TRIX is at -42.19 (Forward-looking technical indicator) is solidly below it's zero tipping point (Another confirmation of trend, DOWN)

WD50 is at -69.23 (Williams%R – 50day average) is solidly below it's tipping point of -50 (Another confirmation of trend, DOWN)

Volume has risen above it's 50-day MA 3 days in a row with increasing volume (Another confirmation of trend, DOWN)

Wall Street 2 – Money Never Sleeps; the movie is to be released Sept 24th. Original release date was April 23rd. (Historically denotes a large market downturn AFTER release) Ok, although this isn't really a technical indicator it does fall right in line with the retail investor's psychological time-line and we can't be all serious all the time, can we?