March 26, 2010
The market gapped higher this morning after yesterdays heavy selling. At this time the market (metals and indexes) are trading at resistance on light volume. This tells me people are a little spooked from yesterday and just do not want to buy at these lofty prices.

Stock Market Training Education

I am trying to provide you with more insight and trading tips/education because I know many of you enjoy it. So here is something some of you may find interesting...

Over the years I have found several things which happen repeatedly in the market. I always found it interesting that in an uptrend the market/commodity or stock tends to gap lower at the open the next day. And during a down trend the market tends to gap higher at the open.

Why is this? I don't know for sure... but my thoughts are that the smart money (big guys & professional traders) manipulate the market using futures to artificially lower prices so they can buy more the at lower prices before everyone else jumps in. It's similar but in the reverse during a bear market. Prices gap up so they can short more shares at a higher price before everyone starts selling again pushing prices lower.

I could be way off here as this is my personal opinion but I see it happen all the time... so whether I am right or wrong in my theory the fact is this price action happens.

Take a look at the SP500 & Dow Jones Futures Charts:

/

/

Market Gap Trading Conclusion:

In short, the market gapped up today (not good)...
I see the dollar is now trading at a short term support level and metals are trading at resistance. So maybe something will come out of this for a short play...

I hope this short reports was of use for getting a feel of how the market moves and what I am looking for in low risk setups.

Have a great weekend everyone. I don't see anything tradable other than this intraday low risk setup which just broke down as I write this sentence, fun stuff...