Replies to post #20171 on lowtrade

[phrantic]

Low, I sure would appreciate any corrections or additions you could point out to my following analysis. I'm attempting to get a grasp of where the market is heading. This is a view of the overall market expressed via a 3-year weekly chart of the S&P using 25, 50, 200MA's. I expect to see a marked pullback for a number of reasons. As the chart stands currently, major long-term resistance resides at 1300 (horizontal green), major support ranging from 1060 (blue) to 1150 (green). Upper short-term resistance trendline (red) coincides with long-term resistance at 1300 (horizontal/green). Lower long-term trendline (red) offers additional support currently at 1105.
My chart-based belief is that the S&P will pull back to its most logical resistance point at 1060 (blue) which requires violating support at the cup and handle lip of 1225 (green). Note the progressively radical/deeper pullbacks beginning in August '09, then September '09, then October '09 (underlined in orange), then February 2010 (underlined in blue forming support at 1060), then the exaggerated pullback forming the cup & handle base producing a low at 1025. Also note the incredible instability forming the cup and handle base demonstrating indecisive market sentiment and emotion. The market has remained primarily overbought since August 2010 to present. Target for the cup & handle is 1395 which coincides with upper trendline resistance (green), and concurrently the lower trendline forming support in harmony with the 200MA. While I see the target of 1395 as a possibility, I would extend caution in this regard based on the overall personality of the chart as delineated above. Another factor lending credence to an impending correction is reflected in the consistently decreasing volume since the inception of the uptrend/bull market beginning March '09 (pink).
Since the low of July '09 to present the major indexes are established as follows: Dow up 21.51%; S&P up 26.10%; NAS up 31.2%. I am convinced the leading index always represents what is going on in the market, but because of the technologicals towing the NAZ by the nose, I chose to use the S&P as a smoothing instrument feeling it's a more accurate engulfing indicator. I would note that since the beginning uptrend in March of '09 the price has pretty much obeyed the 50MA and believe if that is violated it could prove useful as an early indicator of a possible market correction. I value your tech skills and would very much like your input. TIA

[PlanTrader]

Hey guys, Ameritrade's data feed is free and QuoteTracker is free for Ameritrade customers - you can view LII and time/sales in QuoteTracker (or Ameritrade). Ameritrade's data kinda sucks with penny stocks though, so this may be of little help if a person is playing in the pennies. Better to learn in the world of more legit price action, though, not the scammy OTC.

[MossyOak]

Wow, awesome words of wisdom, I know it ALL to well. I was one of the lucky ones who had more seed money than I did bad luck, and heard mentality, so I survived. Wish every one "new" to trading the OTC could read that post, would save a lot of broken hearts and crushed dreams........

Have a great weekend lowtraders!!

[bluemonstr]

Lowtrade...thank you for your words for wisdom. I have been 'playing' around for about a year now...keeping the same money (win some lose some) but it hovers at about the same point. Recently I've decided to give this more of my time and see what I can do with it. Again - thank you for your post - I find this very valuable. Up to this point I have stayed away from pennies and plan to stay away (as my Tradeking account simply charges too much to trade in penny stocks).

TIA!
bluemonstr

You've just touched on catch 22. All new to the markets start day trading OTC penny stocks. There are many websites which offer paper trading. But non which offer paper day trading I know of.

I use to use Quotetracker and Scottrades free real time data feed years ago. Data was 20 minutes delayed. I have no idea if that is still available. It was good to paper trade with and just what you want.

There are other non broker trading platforms which will offer 2 week free trials, with free level II. Quotetracker is free, but you need a data feed. Those cost money if Scottrade doesn't still offer free data.

Here is a link to many links which could help you learn to trade daily.
http://www.info.com/Day%20Trading%20Data?cb=27&cmp=4010&gclid=CPDkkKGku6YCFQty5QodQCe_HQ

I have to say CAUTION with a capital "K" when trading on the OTC, your up against professionals which have no mercy. Basically it's like stepping on a pro football field with no experience. Your odds are you will get hurt bad. But that seems to be the only way to learn.

I have a great deal of experience and at this point in your education, can only say.
The main thing to remember is don't get involved with the herd mentality!!!! Buy & Sell with determination, above ask and below bid, when trading a fast moving stock move. Don't wait for a turn around with up trends or down trends. Getting passed by can cost more then, just being first in the next order book line.

The 2nd MOST IMPORTANT thing in the beginning of your learning curve is to preserve enough cash to continue learning. This means greed is very very bad, because greed keeps you in the play until it's too late.

So while you monitor time & sales, level II and bid/ask sizes, to determine patterns, needed to be a successful day trader. Sell quick when profits present. Wanting more, listening to message board herds, and trading what you expect to happen is the road to failure.

There is no such thing as a bad gain, but every loss is bad. What gain you may not get, by selling early cost you nothing.

Much luck, ask questions as you progress. I'll try to help. There is so much for day trading pennies. You will find trying to control emotions the hardest thing to do. But you must to succeed.