Stocks fell from their all-time highs on Monday, the penultimate trading day of a record-breaking year for equities.
The Dow Jones Industrial Average traded about 185 points lower, while the S&P 500 fell 0.6% and Nasdaq Composite was trading 1% lower. Tech was the worst-performing sector among the 11 S&P 500 groupings.
Some of the biggest winners of the year, including Apple, Microsoft and Visa, all slipped about 1% on Monday as investors took profits. Apple and Microsoft have led the market gains this year, rallying 82% and 55%, respectively.
“The best-performing Q4 sectors are leading to the downside today, and that implies some short-term selling and people positioning before year-end,” said Tom Essaye, founder of the Sevens Report. “The market was very overbought at the end of last week. Nothing really new has occurred to push the market up in the year-end.”
U.S. equities have enjoyed a strong rally in December, with the main indexes hitting record highs last week amid year-end optimism. The S&P 500 has notched five straight weeks of gains, rising 29.2% in 2019. The benchmark is within reach of a historic year, sitting about a percentage point away from having its best year since 1997.
Monday marks day four of the so-called Santa Claus rally period, which has historically given a boost to stocks. The S&P 500 rose 0.5% last week during the shortened holiday trading. Since 1950, the benchmark has rallied an average of 1.3% during the final five trading days of the year and the first two sessions of the new year, according to the Stock Trader’s Almanac.
P + F = D
- Be patient
- Respect your exit (below 9 EMA)
- Sell part of your order
- Otherwise sell and make the green bar out of the channel an entry
Entered before close of the 1st bar (On the platform) – which was red at the time.
Consistency is a function of a care-free objective state of mind where we are making ourselves available to perceive and act upon whatever the market is offering us from it’s perspective at any given now moment.
- Carefree – meaning fearless
- Objective – I trust myself to act in my self interest without any reservations, hesitations or internal conflicts under all circumstances
- No potential to associate this now moment with anything in our rational mind as a memory
- No potential to define or interpret market information in a threatening way
7 Principals Of Consistency
I am a consistently successful trader because
- I objectively identify my edges.
- I predefine the risk of every trade.
- I completely accept the risk or I am willing to let go of the trade.
- I act on my edges without reservation or hesitation.
- I pay myself as the market makes money available to me.
- I continually monitor my susceptibility for making errors.
- I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.”
Being Objective – Thinking In Probabilities (Fundamental Truths)
- Anything can happen.
- You don’t need to know what is going to happen next in order to make money.
- There is a random distribution between wins and losses for any given set of variables that define an edge.
- An edge is nothing more than an indication of a higher probability of one thing happening over another.
- Every moment in the market is unique.
Excerpt From: Mark Douglas. “Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude.” Apple Books.
- The variables that define your edge are present or not
- Trade in sample sizes (20-25 sample sizes)
- Entry Signal
- 9 EMA
- 15 EMA
- 9/15 EMA
- 65 EMA
- 1M EMA
- 5M EMA
ENTRY / EXIT
- OPEN. ABOVE 1M 5M EMA
- Entry: 9/15 EMA
- Exit: Open And Close Below 15 EMA
- OPEN BELOW 1M ABOVE 5M EMAS
- PREDEFINED PREMARKET RESISTANCE