Insider Report - 9/2/10

Today, Thursday the 2nd of September the markets traded with some of the lightest volume of the year. This however, comes as no surprise. Most people are now awaiting the highly anticipated government jobs report for August. While many await this number and the markets will react, we simply cannot take these numbers as 100% fact. These numbers are not fully representative of the overall picture, all we need to do is place ourselves on the right side of the trade as the markets will react. If you must trade this tape the wise thing to do is wait for the reaction, then trade it. Typically we will see a large move in either direction, this initial move is never the smart money. Therefore, remember this saying, the first move is ALWAYS the wrong move. If we see a quick, fast move to the down side this can present a quick long scalp opportunity however, this is not for everyone, only those with quick fingers and stops which they abide by. Next week will continue the light volume action with the Labor Day holiday hangover and the Rosh Hashanah holiday. These two weeks are the time when the executives/top traders/managers take vacation and the junior squad takes the mound. Therefore, based on this simple fact it is often difficult to put too much belief into this rally – although we will not completely dismiss the action.

Looking forward to Friday, the trading action should look much like today. After the first two hours of the trading session the volume will deteriorate. This is the environment were the amateur will get into a trade out of boredom. Restrain yourself, the key to winning in trading and investing is waiting for the right moment to pounce, when numerous factors are in your favor, then and only then you take a trade. Another excellent shorting inflection point will be here very soon, this is the moment to make big money. You need to be prepared for the move once this light volume action passes. The S&P 500 index will have first resistance 1103, and 1117. The most relevant support levels for the S&P 500 Index will be 1084 and 1052. Remember, light volume action typically represents moves higher in the markets therefore you must be cognizant of this fact. Bottom line, many of my readers want action, action, action but you need to realize something very important; there is no get rich quick in the markets, you NEED to express patience, have your capital free and wait for the right opportunity. In the past during this time of year I would never look at a stock, even when I was managing and advising those controlling billions. This is important because it is exactly what is occurring around you right now. Once my good ol' comrades return from their weeks of decadence we will resume taking profits hand over fist. For now, tomorrows key points on oil are.... GET THE REST OF THE INSIDER NEWSLETTER BY SIGNING UP FOR OUR FREE TRIAL NOW.