Happy New Year and Welcome Back to the TradePilot Pro Blog.
We have been on a six month hiatus from blog postings as we have been diligently working on our newly designed website www.tradepilotpro.com. Please stop by and take a look around...Be sure you sign up for free two-week trial to our S&P e-mini trading room where we discuss market action and trading profitunities in real-time.
VOLATILITY IS BACK! Finally...As every day trader knows price movement is required in order to have opportunity to profit or what we call "PROFITUNITIES".
Our first post for the new year is entitled "Anatomy of Long Liquidation" and the best way to present this is through visual chart annotations shown below. To set the stage, price had been stuck in a multi-day range very near 50% retracement levels that marked the 2007 highs to the 2009 lows. The Bulls tried many times to expand above this level in order to attract "new buyers", but there were "no takers". So with too many "bulls" the market had become "overcrowded"...Well the seasoned trader has seen this movie several times before and frankly it's a bad re-run and we all know the ending...It's bad for the bulls. No different in this case this past week, as the overcrowded longs were forced into "Liquidation".
Our movie clip starts on 1/15/10 on a test of the multi-day range support level at the 1125-1127 zone. Follow the sequence of chart annotations and see how the movie ends for the bulls...Discretion Advised...It's Not Pretty.
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Blending Market Structure, Fibonacci, and Volume Analysis
Joe Baker
Founder of Trade Pilot Pro, business entrepreneur for past twenty-two years in Real Estate & Financial Industry. Self-taught trader and Financial Software developer, member of Market Technicians Association, working on CMT designation
David Dube
Professional Trader for over twenty-five years having held Senior Trader positions at Lehman Brothers and UBS Investment Bank. David's knowledge and experience of Global Markets brings a unique trading perspective to Trade Pilot Pro's members. Currently living in Connecticut with his wife, he is an avid aviator holding Commercial and Instrument Ratings.
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Trading of securities, options and futures may not be suitable for everyone and involves the risk of losing part or all of your money. Commentaries are educational in nature and are designed to contribute to your general understanding of financial markets and technical analysis. Use it how you want and at your own risk. We are not registered investment advisors. This information is a general publication that reflects our own opinions and is not a specific recommendation to any one individual. You must consult your own broker or investment advisor for investment advice. Past performance is not a guarantee of future success. Controlling risk through the use of protective stops is essential.