Why the Market Should Pay More Attention to Sports and Poker

Did your coach ever tell you not to signal before you made a move, or do you know why it’s so important to have a good poker face if you’re trying to bluff? It’s because it’s pretty hard to trick a person that can see what you’re going to do next. What does this have to do with trading the markets for consistent profit?


The market signals before just about every move it makes.


So, why doesn’t this make the market incredibly easy to predict? It’s because most traders don’t know the market’s “tell.” That’s why you learn to watch your opponent’s position in sports, or to watch your opponent’s pulse and face in poker. If you don’t know that a nervous twitch means your neighbor is trying to bluff you with his pair of twos, then how do you know he doesn’t have the cards? On the other hand, if you know his “tell”, you can anticipate his bluff even if the rest of the table thinks he’s got a strong hand. Doc Severson spent a lot of time (and a lot more money) looking for those signs in the market, but as James Bond remarks in Casino Royale, “It was worth it to discover his tell.”


Learn the Market’s Tell
 

After years of study and testing (he was an engineer, after all), Doc Severson found a way to see the market “signal” before it makes a move. He used it to position himself before the 2013 S&P rally, and he is seeing the market signal another big move now. He’s already preparing his positions for this move, and he wants to show you how to anticipate them as well.


How to Predict the Next Big Move for Yourself (Free Video)

 

Gold Chart of The Week for Monday December 9th

Before the release of the Non Farm Payrolls last week on Friday, US markets could not catch a break. Lower highs and lower lows were put in on the daily chart of the S&P 500 after the new high was printed on November 29^th. On Thursday, stocks took the day to consolidate inside the prior days price range, but exploded to the upside at 7:30 cst. Markets were treated to a better than expected jobs number where 203,000 jobs were created and the jobless rate in the US hit a five year low. 

Additionally, Consumer Confidence in the US shot up to a five year high soon after the jobs numbers were posted. In short, LAST WEEK traders and investors used favorable reports as a reason to buy equities. The big question is whether the stock market will react the same way THIS WEEK, when data is released. We will have to wait and see.

There is far less important economic data being released in the US compared to last week, but we will hear from multiple FED Members and will also be informed on the ongoing budget negotiations in Washington. Traders will be focused on the language being used this week to determine whether the FED plans to taper their Bond Purchases before 2013 comes to a close or not. This language will be important as investors try to decide whether or not they will continue to buy the market in new high territory this week. Pre-Market, futures are only a few ticks below the high that was printed on the 29^th.

I feel the best way to approach this week is as a technical trader. The plan will be to break down price action on both daily and intraday charts, looking for the best technical prices to  enter and exit trades. I think it will be far too difficult to make dependable commitments to any Financial market when the US Indexes are testing the highs again and waiting for speeches from the very members that will decide next week whether or not they will taper.

It appears the Gold Futures may be waiting on the same confirmations. Last week, while the market did see some nice volatility in a range, we did not see a test of $1200 or a breach of the prior week’s highs. I believe that Gold traders are waiting like the rest of us for a final determination from the FED before either levels are tested again. The language used this week by FED Members may give clues in advance of next week’s meeting as to whether or not we should expect Ben Bernanke to close out 2013 with a slam in the equity markets.




Posted courtesy of Brian Booth at INO.com
 

Advanced Swing Trading methods from one of our favorite hedge fund managers. For free!

 

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