Market Commentary 1-15-10

SchoolofTrade.com Daily Commentary 01-15-10

We didn’t really know what to expect on Friday, except for some slightly lower volume due to the Holiday coming on Monday, however, any concern over what the day looked like was answered soon after we opened our charts.

What we saw was an example of what most new traders MISS when they begin their trading day…the market was SCREAMING at us its intentions, and we were able to ‘interpret’ those intentions based on a few simple technical indicators.

Here’s what we saw @ 745am EST:

• Most markets were sitting on their previous close levels

• Most markets were trading in a narrow trading range

• Very little LARGE orders on the Time & Sales Window

• Our Pace of Tape ® indicator was all VERY low and RED

When we see days like these we know one thing is for certain….BEWARE.

When the markets open and sit on their previous close level that alerts us that there is very LITTLE conviction in the market as to whether we will go UP or DOWN.

Think of it this way…

• The SELLERS tried to move it DOWN…nobody there.

• The BUYERS tried to push it back UP….nobody there either…

• So price sits there, flat, on the close of the previous day.

In addition to sitting on its close, we saw a very narrow trading range, which gave us a heads up that even if we DID see anything worth trading today, the potential for profit would be less b/c the market simply wasn’t moving with any range.

We also noticed there were NO big money traders in the market b/c the FILTERED time & sales window was almost empty across the board…where WAS everyone?

And lastly…the Pace of Tape was RED, and VERY low… time to grab the GOLF CLUBS!

Days like today come around at least 2-3 times a month, and when they do, they threaten to TAKE BACK all the money we worked so hard for throughout the week.

Did you see these vital signs of the market?

Did you miss what the market was telling you?

If so, be sure to come join us on Monday, and we’ll show you EXACTLY what to look for next time!

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