The stock market today again dipped down. The last few weeks have not been the greatest for the stock market - today was no different. The Dow-30 dropped another -29 points. closing at 12,540. It was a pretty calm day in my opinion.
The market is looking tired. The different indexes are breaking down and looking weak. Keep an eye on it. Here are my thoughts as of 10.50 AM. Watch for lower prices or a change in action and sentiment. It takes time for charts and peoples mentality to set back up properly.
Here are some quick thoughts about why you should be watching longer time frames and how the market bounces off these critical areas. Watch key levels of daily and weekly charts to spot trends and insight for intraday moves.
In this video I show you how I trade securities for the weekly, daily, and intraday charts. What I watch for on the Dow-30 and how to spot different support and resistance levels. I also dissect Apple with this same concept of how it bounces and multiple ways of watching.
The market today already was at the brink. After President Obama spoke today discussing taxes for the wealthy and other economic items, the stock market started to sell off. All though there were a few stocks that made some great pops, most of the stocks are pushing to the down side or are still at critical levels.
The Dow dropped over -185 points to close at 12,570. The SPX, EEM, IWM, QQQ have all broken their support levels. They may go back up to retest those new levels as resistance levels to see if they can go to the upper channel, but you can not deny that today they were broken, so probability they will stay in this lower level until things rebalance.
Many people believe that stock trading is like gambling. I even hear this from my mom who actually trades from time to time. Even she mentioned that stock trading is like gambling. The fact that they could be so far from the truth for a person who is more educated on the market or human psychology. Typically the people that say this, either hear of the bad stories, incur incredible losses, or to simply do not understand the markets. They could also be looking for someone or something to blame to make themselves feel better.
There is a recent post I did on my personal website about the things I study. Primarily most people think I study investing if they hit my Tradersfly.com website, others will say marketing if they visit Marketingkite.com, some may even think Business to Business or Internet SEO. The fact is I study one main topic and one main thing only. That is human behavior and psychology of peoples actions, reactions, and people interaction. Read more from my blog post here.
The financial view of why stock trading is not like gambling
One key principle to understand is in the casino if you walk in, place your bad on black or red, you lose all of your money. The same goes with the slot machine. Every now and then you win and get some money back but this is winning.
With the stock market when you place your bet on a certain stock or company, if the stock does not go in the direction you want to go you can sell it off and get a portion of your initial investment back whereas with the casino you would lose all of it if you did not choose the correct direction.
What makes the stock market much harder is that if you did choose the right direction when do you actually sell in cash in your chips? This is what many stock traders struggle with especially beginners.
The fundamental level of livestock trading is not like gambling
However there is a deeper core I think behind it. If you read my blog posts from my personal website, you already know the answer to this. The reason I believe stock trading is not random is that all of it is based on human behavior. Not just simple one person human behavior, but mass quantities and mass behavior. It has never been random, nor will it ever be random unless you are one of the few that cares to say that to make yourself feel better.
The market dipped on the open today, and slowly went back up hitting its peak at 11.00am. After that it continued its sell off. Start high early on and sell off to the end of the day. Bull markets start low and trend higher towards the end of the day. Basically sellers pushed things to the down side.
I'm Sasha, an educational entrepreneur and a stock trader. In addition to running my own online businesses, I also enjoy trading stocks and helping the individual investor understand the stock market. Let me share with you some techniques & concepts that I used over the last 10+ years to give you that edge in the market. Learn More
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