6/30T2:14 Important News

TALKX Floor Talk: Rumors about troubled banks returning to the market
The major averages saw a fairly sharp pullback in the past half hour (Dow lost about 50 points over that time period), although they seem to be stabilizing right now. The likely reason for the sell-off was another rumor that a big investment bank was having liquidity issues, which was similar to the chatter that circulated last week. However, the muted impact to the major averages (relative to what they would have done 3-6 months ago) suggests that the market isn't quite buying into that type of rumor at this stage. The important thing to be aware of is that these "investment bank in trouble" rumors are starting to circulate on trading desks again, but that as of now, they're not having much of an impact.

6/30T11:25

Market comments: SPY, DIA, QQQQ are all giving 15 min. buy signals.

These signals are weak however, because there is no alligator developing. This is the last day of the month and quarter and I'm fearing a market rally for no other reason than the usual manipulation. If the 60 min charts looked even remotely capable of a real rally I'd look to go long the indices, but the 60 min.s have a lot of work to do.

At 11:30 everything is going contrary to the current trends. The averages are rallying up, gold and Silver are selling off, Oil has reversed lower and the US$ is moving higher. This all started when an economic number came out this morning better than expected, Chicago Purchase.

Also lots of talk of the DOW hitting the 20% sell off from the high of October. That fact triggers the Bear market rule. The markets immediately bounced off of that number. Classic volatility around perceived important numbers.

6/27T1:09 Rules of the Road update

Rules of the Road (Formerly known as Trading Technique): Day Trading...

1) Determine the direction we want to trade based on the daily charts. If the daily chart is positive than we only try day trades in the buy direction and vice verse.

2) Use the 60 min. chart to initiate the position. We must have all three indicators going in the same direction and at the beginning of the move in that direction.

3) Use the 15 min. chart to book gains. As soon as the 15 min. gives a signal contrary to the 60 min. then get out of the position.

4) When using 60 min. or 15 min. charts we must only make decisions at the end of the bar. We DO NOT react to the possibility of where we think the bar will end up. Only react to reality at the end of the bar.