welcome to this tutorial on stock market trend signals
and going to demonstrate to you
how I in line is which side of the
market I want to be on to decide whether
I want to be long short or if we're just
in a neutral situation so there are five
tools that I use to help me determine
that these are big picture tools that I
begin with and these will help me again
to determine whether I want to be
bullish or bearish work whether in a
neutral situation they make a huge
difference in your trading so here's
tool number one and by the way I do look
at these in this order during the
trading day so here we've got a quote
screen and you'll see that I've got
equity cash equity futures and I get
various sectors down there and so
there's two things that we look for here
number one we look simply for green and
red so obviously if it's green those
markets are up for the day if they're
red they're down for the day
so if we get all red then obviously
we're in a very bearish market that day
if they're all green very bullish and if
there's kind of split then we've got
what's called a Christmas tree in
trading where it's a bifurcated market
you also want to look at your sectors
edge we've got them down there is there
I mean of all the sectors are red oh my
gosh that is a very very bearish day now
the other thing that you want to look at
here are the percentage so the net
changed and that percent change so look
at the equity cash for example there
we've got the down the SP the russell
2000 the nasdaq 100 so you see the dow
is up a little bit well the percentage
point 1 4 percent is negligible
basically I consider that zero so the
Dow today pretty neutral at this point
the Nasdaq 100 is very very bearish
anything that gets close to 1 percent I
would consider very bearish so even the
Russell pretty bearish so you can't just
look at red and green that's the first
thing we just eyeball real quick takes
half a second and then you have to
actually look at the percentages and if
you're trying to determine okay well if
I we've got a bearish day which
generally this is balancing a little bit
more toward the bearish side
all right which markets do I want to
trade today right I might want to trade
the queues I might want to trade NASDAQ
stocks or whatever if I'm gonna be
bearish I'm not gonna treat the Dell
stocks right now right because they are
not as bearish as the other markets so
that's the first tool that I look at to
give me a big picture of what I expect
in the market now here's the second one
so the second one this is up down volume
again I'm going to show all examples
here with the Nasdaq 100 but you can do
these with the Dow the SMP whatever so
what this is is how much bullish versus
versus bearish volume ler is in that
index so every day starts out at 2-0
you'll see the big 0 line there the
horizontal weight line so everybody
starts at 0 and then it goes up or down
or sometimes it just goes sideways so if
the line just hovers around the zero
line then that means that well there's a
really no imbalance of power as measured
by volume in that index and that's good
to know you might be in a choppy market
that day and if you've wondered how to
find out if you're in a choppy market or
not this is another way but in fact all
of these are so not only did these help
you determine whether you're in a
bullish or bearish market but if you're
in a choppy market so anyway right here
we've got definitely a dominant bearish
energy of overall volume again these are
just big picture stats and these are not
indicators by the way these are actual
indexes you type them in like you would
a stock index if you're curious about
what the what the symbols are and that's
what you'll need are the symbols like
stop typing in a stock symbol contact
your data broker they will vary from one
daily data platform to another one
charting platform to another one broker
to another so here you see the
TradeStation ones all right the third
thing I look at is the advanced decline
issues so and then I put a little moving
average with it as well but because as
you can see the cyan line there gets
kind of choppy so I'm looking for the
overall direction here on this
particular day in the morning in the
first hour we've definitely got the
bullish
predominant energy and so the number of
issues going up versus down is
imbalanced to the upside so I would only
want to go along now let's say that I'm
looking at my technical analysis and I
get a great short on my charts what I
want to take it probably not right
probably not because I don't want to
fight the dominant energy of the market
that's probably going to be a great
setup that fails because the dominant
energy of the markets to the upside and
it's pretty hard to fight that pretty
hard to fight that now it turns around
there about an hour later around seven
forty eight o'clock so forth and then I
want to be bearish and only taking short
so gotta always with trading got always
keep your head on a swivel right and you
get it know the things can change at any
time but this will give me a big picture
as to ok maybe I'll only take Long's you
know the first half of the day and then
only shorts a little later on and then
the the last one that I look at here I'm
sorry the fourth one I look at this is
the tick index and again using the one
for a nasdaq-100 right now just for our
example and here the big deal is above
or below the zero line so I'm me in this
particular situation if it's above zero
then we are generally in a bullish mode
now this is a faster index so we're
actually going from slow to fast and
that's how that's why I do them in this
order so this one happens a lot faster
and gives you more precise readings at a
snapshot in time
so I've got a one minute here so now
don't expect it to always hold the zero
line to the pixel you know that's just
unreasonable but you can see I've got my
green lines above my red lines below and
so if we're in a Polish day
we're just looking forward to basically
stay at zero or above and in this case
not really interested in shorts so when
we have this scenario going on like okay
only interested in lungs even if they
get valid short setups those are
probably going to be ones that fail so
I'm only going to take my long
setups today or at least during this
period of time now again I can switch
around it any time and then finally the
last thing that I look at is the actual
market that I'm trading so those others
are more breadth indicators right
looking at the entire index so then I'm
going to drill down to the market that
I'm trading in this case the Nasdaq and
I'll say okay let's look at a
longer-term time frame and this case we
got a 10 minute so the the time frame
can vary depending on your short-term
timeframe is let's say you're trading a
short term tick chart or a one or two
minute chart
I'll get the long term chart and just
see ok what is the trend the market
trend of now your particular stock or
futures contract or Forex or whatever
your trading and here we can see over
three days really the dominant direction
is down so could to be made could some
money be made going along yeah there
could be mm-hmm we could see some
retraces there but really why make it
hard why don't we just go with the flow
right stop fighting the flow don't be a
treating salmon and try to swim upstream
plus the other thing is not only will
your win-loss ratio be better if you're
just shorting on days like this but your
risk reward ratio would be better
because the down moves are going to be
more dramatic than the up moves so there
are five tools for you to use to
evaluate the market trend at any given
time in any given date when all those
align then well at least for me in my
house that's the direction that we trade
and that's the only direction that I'll
trade regardless of setups that I
receive so if you liked this video
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