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Mentor Mike’s Monday Morning Mentoring Moment for 8/22/11

Mentor Mike’s Monday Morning Mentoring Moment for 8/22/11
 

You don’t need to master complex cycle theories or pay to join some elite trading group in order to recognize and utilize daily turning points. I can teach you how to spot them and exploit them with conventional technical analysis.

 

Scoreboard

ES: 8 wins / 0 losses

 

Mentoring Moment

Fundamental analysis is all about information that could potentially affect the value of a stock, commodity or currency.  There are two potential problems with fundamenals, the two “T’s”: time and truth.  Is the information revealing an opportunity that is occurring right now?  Or, has it already happened?  Or, will it happen in the future? If you rely on fundamentals alone, it is easy to be too early or too late.  Then we must consider if the information is accurate.  Is the source reliable?  Fundamental information can be wrong for any number of reasons ranging from innocent mistake to outright criminal fraud.  Remember Enron?

Technical analysis is about the movement of the actual price on the price chart.  It also includes signals produced by various indicators that are derived from price movement.  Technical analysis speaks the immutable language of mathematics.  When a trader enters or exits a position in the market, he leaves “tracks” that cannot be concealed.  The relationship between fundamentals and technicals is nicely summarized as follows:  “Fundamentals tell you what the market should be doing.  Technicals show you what the market actually is doing.”

Chart Chat

Today’s ES demonstratess a HI-LO-HI configuration with the last HI skewed slightly toward the beginning of the session.  Have a great evening.  Be back tomorrow.

 

Please click on the chart below to make it  larger.

ES Chart Daily
Today’s 5-Minute ES Chart

 

 

 

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