The Local's Take: Weekly Wrap Up and Look Ahead

Good Evening,
Let's start out with a little trader psychology discussion. Because volatility is still rather low, I basically wake up each day saying: if they come get me, great. Meaning, I don't have any pre-conceived notions of volatility or opportuinities. The past year of equities grinding higher and years of experience in understanding that the markets breathe in and out and sometimes, they rest! Today was one of those days that you go into thinking: Friday before a holiday, very light economic data, overall the VIX is low. My mindset is to play it carefully. Maybe wait for that extra pip or two, maybe cut back in the trading size as you may only get one opportunity the entire day. That opportunity did come and I was glad to take it, but with smaller size, the eagerness went away, the relaxed nature of how trading should be was evident.
So the bottom line is, if you have discipline and are realistic of what the markets provide, you will trade accordingly, both in your frequency and in your size, allowing you to be in check with your mental state and trade witha clear, un-emotional mind. I am not saying it doesn't come without practice, but that is what experience gives you. You have to be willing to get the experience, which for a new trader means easing into things.
OK - you know I am big on pshychology, so with that out of the way, let's look at the SPY, first with a few months of data and then just the past few days of trading.


You can see how we are bumping up against a trendline that is providing resistance and  directly above that is an old supportive trendline that may act as resistance. Selling rallies anyone? If you wanted to sell rallies this was the week. Twice, we were up over 75 points and both days, we finished well off our highs. I am used to saying that we finished well off our lows - well, we are doing that as well. So overall, a relatively technical, choppy week of trading that did provide for good opportunities, both with standard deviation trades and retracement trades.
Today in forex, here was your BUFFALO BOUNCE:

The look ahead part: I protected the portfolio as we have 4 days until unemployment data is released. Lots of data before that, so stay on the economic calendar folks.
Happy Trading and Be Environmentally Cool
Coach Brian