We can chalk today up as just a consolidation day. Volume contracted today, which is just what you'd expect from a consolidation day. However, the failed intraday rally has to be a bit of a disappointment to the bulls. That rally didn't quite reach the March highs, so, on a daily basis, the market's still making lower-highs. So it seems to me that the line in the sand is now right around the March highs. The bulls need to break those highs so that yesterday isn't seen as just a one-day Fed induced buying panic.
The index charts are below. One common thing in these charts and those of the Dow and Russell 2000 is they all traversed their 10-day moving averages (at least) twice today -- closing below those averages for the 9th straight session.
no changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Down | Down | Down |
| Intermediate | Down | Down | Down |
| Short-term | Lat | Down | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Hi Mike,
I've been following your blog for awhile.
I like today's charts
zee
HI there,
It's been a while since I've posted, but I really appreciate your hardwork on this website, Michael.
Anyway, my question is about R. I was reading about a year ago when you were using an R value of .7% of your total equity. So, if total equity was $100,000 that would constitute a maximum risk of $700 per trade. From a statistical standpoint, What is the maximum level of R a person should risk and still be able to profit? Basically, at what size does R become too risky in terms of risk management? 1% of total equity? 2% of total equity? I'm trying to figure out what happens to a guy who hits 10 bad trades in a row...I can do the simple math, but I'm wanting to maximize my profits by using the largest R possible in terms of a certain percentage of my total equity being at risk per trade. Any ideas on this?