Points of Interest 5-19-08

S&P 500 (S) 1411 & 1380 ~~ (R) 1430 & 1450
Dow Industrials (S) 12,840 & 12,700 ~~ (R) 13,015 & 13,240
Nasdaq 100 (S) 1998 & 1943 ~~ (R) 2052 & 2065

It's still going to take another move up before my market direction indicator provides a "Low Risk" Sell Signal. Typically, the signal will last for 2 - 4 months before it changes.

As I've mentioned before, market calls will continue to be easier to make than individual stock calls. When you trade the market, you reduce your risk 20% since 20% of a stocks movement comes from the stock itself, while the other 80% comes from the market. By trading the market, you take the 20% stock movement out of the risk equation. To keep things really simple, I would suggest trading the holders (i.e. QQQQ,. QID, SPY, SMH, DIA, BBH, etc.), which allow you to trade individual sectors. It's not going to give you as much action, but it will allow you to fine tune your skills to the point where you feel VERY confident about your trading. If the market is sloppy, the only stocks I trade are the QQQQ and QID. Remember, trading should be SIMPLE and OBJECTIVE. There is no reason to make it complicated. If you think too much, you aren't trading properly. When I think "trade," I'm thinking 1 - 3 days. I'm not referring to the breakout setups, which I consider longer term in nature.

I can't post a chart of every potential setup I watch on a day to day basis, but you can get additional ideas if you scroll through the blog. It'll take some effort on your part.