Day Trading Indicator
As a trader it is very important to be aware of what other traders are focused on. It's important to know what market is influencing or acting as a catalyst for movements in the stock market.
At times movement in the dollar can cause stocks to react in a certain fashion, at other times fluctuations in oil prices can cause stocks to rally or sell off and about 2 months ago it was the Japanese Yen that was causing the stock market to move higher or lower. Well now it's bond yields that is having an impact on the stock market. So as a trader it is important to be watching the bonds throughout the day.
Above is 5 day 5 minute bar chart of the S&P500 in green and in red is the TLT which is the 20 year treasury bond fund. What I've noticed is that the bond market (TLT) leads the S&P by about an hour. If you look closely at the above chart you will see how the bonds (red line) makes a top and about an hour later the S&P (green bars) will make a top as well and then sell off. The same thing happens at market bottoms. TLT will make a bottom and about an hour later the S&P will also make a bottom. This is an excellent indicator because it gives us some insight as to where stocks may be headed over the very short term. This can come in very handy if you are day trading.
I'm sure at some point this relationship between bonds and stocks will fade away much like the Japanese Yen's impact on stocks has, but for now while this relationship is working why not be aware of it and follow it. Watch those bonds!!!
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9 comments:
From your previous posts I can conclude that you were well rewarded today on your insight - congratulations!
I've made some money today as well, though not much. Your last week warning on bonds was part of the reason I had a good week.
Thanks a lot Kevin!
Kevin,
is there an email at which I may reach you? Thanks
Babak [AT] tradersnarrative.com
Hi Sandro,
I'm glad you made some money...This week has been very good for me so far...we'll see if it continues..
excellent.
Nice post. I'm just curious.. how do you manage to keep track of all the intermarket relationships and/or other correlations. Ex. do you have a checklist that you go through everyday? Also, how do you find new relationships.. say spreads b/w gold, us bonds and cdn bonds?
Hi Andrei,
I don't have a list but I do have 5 or 10 intermarket relationships that I watch everyday.
As far as finding new intermarket relationships, I'm always reading about fundamentals that can affect a particular market which helps me discover new relationships.
Nice article
This is my one of my strategies Fo Day Trading
MAKING MONEY $50 - $100 AT A TIME
Play the News and you will make money consistantly by doing this. money stocks finance investing daytrading...
For the newbies that have not defined their trading style and those that want to make quick money.
Make your money a few ticks at a time... 5 - 6 day trade a day of 50- 100 at the end of the week will add up to about $1500 -$2000 a week.
Scan for a stock with some MOMO and play it for a couple of ticks. When you buy stock, buy enough for a $50 profit per tick ( 5000 * .20 sell at .21 = $50 profit and so on ) place your sell inmediatedly 1 or 2 above your buying price.
Is easier to sell on the way up than on the way down, Specially on news plays. By placing your order inmediatedly after you buy, you will almost get it all the time, and you will detach yourself emotionally from the play.
I pay 7.00 per round trip with Lowtrades, UNLESS I BUY 100 k SHARES THEN IS $10.00.
This is not my only trading Style I play news, bottom bounces and swing trades also. This is only a sugestion for those that have not defined their own style and are new to pennies... if you are disciplined you will make small gains consistently... yes there will be some that runs some more after you sell, in time you will identify those, but many times you will avoid the sickenning feeling of seeing your profit evaporate because you can not sell when everyone start unloading, chasing the bid down...
www.ddotcstock.com
Great post. Very informative and well written. I'll surely use this as a guide as a trader. Thanks for sharing.
i very enjoy all your posting choice, very remarkable.
don't quit and also keep writing in all honesty , because it simply that is worth to look through it.
looking forward to look over alot more of your current well written articles, have a good one ;)
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