Bryan Leighton's Blog – November 2009 Archive (14)

A Day Unlike Any Other (Give Thanks, And Never Forget)

It was a beautiful day on Wall Street, the sun was shining, not a cloud in the deep blue sky. My day started just like every other day; wake up at 6am, catch the train into the city, in the office by 8am where I would have my list of stocks for the day on my desk in front of me. I walked into the office every day ready for battle, only this day I could have never imagined the inconceivable event that was about to present itself.





As we all manned our trade stations and prepared… Continue

Added by Bryan Leighton on November 26, 2009 at 1:20pm — No Comments

U.S. DOLLAR: IT'S ALL REACTION NOT PROPORTIONATE

When the market rallies it is generally on the back of a falling dollar. Remember it is not proportionate, however, it is reactionary. Therefore, regardless if the dollar is negative or positive on the day the market will catch a bid if the dollar declines regardless of where it is trading at the time.

Added by Bryan Leighton on November 17, 2009 at 2:38pm — No Comments

TRADE LESSON: UNDERSTAND WHAT MOVES MARKETS

Many times we can see two leading stocks or ETF's telling a different story. Therefore, one may be trading higher and the other could be trading negative. How do we know which one is talking to us. While it is not easy to differentiate between the two just watch the major indexes. When the major indexes react with the leading stock or ETF then that is the leader. In the example below we have XOM, and the OIH(oil services holders trust ETF). Clearly XOM is the stronger and more important of the… Continue

Added by Bryan Leighton on November 17, 2009 at 12:53pm — No Comments

U.S. DOLLAR: HOW LOW WILL IT GO?

The U.S. Dollar index has broken down again after the Fed Chairman Ben Bernanke's speech. The DXY is now at new lows for the day and for the year. The market obviously does not believe the Treasury or the Federal Reserve Banks's tough talk on a strong dollar policy.

Added by Bryan Leighton on November 16, 2009 at 2:53pm — No Comments

TRADE LESSON: FORGET THE NEWS IT'S JUST NOISE

Often many traders listen to what comes from one of the financial networks and they try and react after they hear a news report. Usually the news is already baked into the cake and the market is usually going to move contra to the news. Today the market had a negative Michigan sentiment report and many people became very bearish after the report. We instructed our traders to just pay attention to the U.S. Dollar as that is what the market is currently trading off of. Simply put the market is… Continue

Added by Bryan Leighton on November 13, 2009 at 12:46pm — No Comments

IS THIS CHART THE SPY OR THE UDN?

THE SPY CHART VIRTUALLY MIMICS THE UDN (INVERSE U.S.DOLLAR INDEX ETF) CHART. EVERY TRADE IS A DOLLAR TRADE. YES, THIS IS A CHART OF THE UDN.

Added by Bryan Leighton on November 12, 2009 at 3:14pm — No Comments

COULD THE MARKET BE TALKING TO US ?

The VIX (CBOE VOLATILITY INDEX) has put in a very nice bottoming tail on the 60 minute chart. This tail was on heavy volume and could be signaling further upside to the VIX. Often the VIX rises when there is fear in the market or when traders want to hedge their long positions. In any case keep an eye on the VIX.

Added by Bryan Leighton on November 11, 2009 at 10:48am — No Comments

HOW TO TRADE THE BEST DOUBLE BOTTOM PATTERNS

One of the most common and best patternHOW TO TRADE THE BEST DOUBLE BOTTOM PATTERNSs is the double bottom pattern. This is simply when the market seems to retest a low and then bounces higher off the low level. It is important to watch for the double bottom low to pierce the prior low before reversing back higher. This is because market makers are looking to bait in momentum short traders and then come in and rip it against them. Once they are forced to cover their short trade by buying back… Continue

Added by Bryan Leighton on November 10, 2009 at 3:43pm — No Comments

TRADE LESSON: LEARN THE RELATIVE STRENGTH OF A STOCK

Often when a stock cannot catch a bid or rally higher with the major indexes it is signaling weak relative strength. Stocks that have or signal weak relative strength compared to the market are good candidates to be sold short on bounces. For example, FSLR the leading solar stock has not been able to rally with the NSADAQ or the other major indexes. These are the kind of stocks that you can watch for small bounces and take short positions. Remember it is prudent to always use stops as stocks… Continue

Added by Bryan Leighton on November 9, 2009 at 11:20am — No Comments

IS THE 'FRIDAY EFFECT' IN PLAY TODAY?

For nearly nine months the market averted big declines on Friday's by usually finishing flat or slightly negative or positive for the day. However, the past two weeks we have seen major selloffs in the markets on Friday's with very high volume. Therefore, it is prudent to remain cautious today as the market has recovered from the premarket lows.

Added by Bryan Leighton on November 6, 2009 at 11:39am — No Comments

USING MOVING AVERAGES ON MULTIPLE TIME FRAMES

It is important to use multiple time frames in order to find the best support/resistance levels. Often what looks to be a bullish level on a smaller time frame may not necessarily be a bullish pattern on the larger time frame. The same theory holds true for moving averages on different time frames.



For example, the SPY today was putting in a bullish pattern on the 5 and 10 minute charts. However, IntheMoneyStocks.com traders identified the 200 moving average on the 60 minute chart as… Continue

Added by Bryan Leighton on November 5, 2009 at 12:00pm — No Comments

TRADE LESSON: KNOWING THE TRADING ENVIRONMENT TO PROFIT INTRA-DAY

It is very important to understand the current trading environment. If you were a construction worker or a landscaper it is safe to say that you may check the weather outside before going to work. Therefore, as a trader it is important to know what the pulse of the market is. One simple way to do this is to follow the U.S Dollar. When ever you see the dollar lower it will generally give and upside bias to all commodity and inflationary stocks. For example, if the dollar is lower it is important… Continue

Added by Bryan Leighton on November 4, 2009 at 11:21am — No Comments

THE EASY WAY TO FIND A RUNNER

This morning there was news out in the premarket that Warren Buffet's firm Birkshire Hathaway was going to buy Burlington Northern(BNI) for a $25 dollar premium above the previous day's closing share price. BNI is a leading stock in the railroad and transportation industry. This should cause a rally in the entire transportation sector. Therefore, as a trader you can look for sympathy stocks that are leaders in the transportation sector regardless if they are railroad stocks. Yes, railroad… Continue

Added by Bryan Leighton on November 3, 2009 at 11:31am — No Comments

TRADE LESSON: NEVER FALL IN LOVE WITH A STOCK

Many times traders fall in love with stocks. They feel as if they actually are a part of a club or organization. This is very far from the truth. The traders motto is 'stocks are for trading not loving'. Do any of the CEO's now the small share holder? The answer is simply no. Instead traders want to take andvantage of the price action of a stock by using the chart.



For example, look how INTC traded higher on earnings and faded right from the gap higher. This is telling you that… Continue

Added by Bryan Leighton on November 2, 2009 at 10:37am — No Comments

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