Tha daily chart below shows SPY, the S&P 500 ETF with the daily and weekly Aroon trend indicators in the indicator window. The shorter period Aroon represents the daily trend and the longer period the weekly trend. Currently Aroon Up is 100 for both of them.
You should treat trading as a serious business. When you prepare yourself and when you trade you should be able to pay full attention. Anything which distracts you can affect your trades and your profit. Here is a list of what can turn against you in trading:
· Unorganized environment – You desk and computer should be well organized. Material and all the “noise” not related to trading should be eliminated. Don’t try to multitask.
· Physically not prepared – Even if you are not a day trader when you prepare yourself for a trade you should be able to focus for a longer period of time. If you are hungry, tired or sick you won’t able to do that.
· Mentally not prepared – You should have a clear and proved trading plan and stick to it. You can’t change it in the middle of trades. You should feel confident and comfortable with the knowledge you accumulated about trading.
· Emotionally not prepared – If you have strong emotions such as anger, sadness, and disappointment about trading then you are not prepared. The stock market doesn’t care about your feelings.
· Unable to execute a trading plan – If you can’t follow your trading plan and you hesitate when you enter or exit a position then you are not prepared.
· Not being patient – Patience is very critical. A stock could be a great candidate for trading but you have to wait out the right moment. Jumping into trades too early can end up in painful losses.
· Unable to filter out the news – You have to learn what news is important and what is just noise. The bulls and bears have always something to say and both of them can’t be right.
· Telling everybody about your trades – When you talk to your friends and sometimes strangers about your trades it’s hard to explain when you are wrong. The best thing to do is to keep it private.
The performance chart below shows the Railroad, Trucking and Delivery Services indices during the past three months. These three indices are components of the Industrial Sector. All three of them are in an uptrend. This shows a healthy economy where there is a need to transport all the unfinished and finished goods between suppliers and customers.
There are three daily charts below of three different breadth indicators. These three indicators don’t seem to support a possible upside breakout in the near future. First let’s start with $SPXA50R. This breadth indicator tells us the percentage of S&P 500 stocks Above their 50-day Moving Average. You can read more about this breadth indicator here. This indicator has been moving lower creating a bearish divergence. Over 40% of the stocks in the S&P 500 are below their 50-day moving average. See the chart below.
This next chart shows $BPSPX, the S&P 500 Bullish Percent Index. $BPSPX is a breadth indicator showing the percentage of S&P 500 stocks with Point and Figure buy signals. A Point and Figure chart either gives buy signal or sell signal. Read more about $BPSPX here. Over 30% of the S&P 500 stocks are on a P&F sell signal. See the Chart below.
The third chart shows the NYSE McClellan Oscillator, $NYMO. This breadth indicator is calculated from the Net Advances on the New York Stock Exchange. Net Advances are the number of Advancing Issues less the number of Declining Issues. You can read more about $NYMO here. $NYMO has been pretty flat since March, not showing much enthusiasm among buyers or sellers.