Great Week.

According to Bloomberg and my own data, volume has been very low lately. I have written about it often.

MarketWatch says “With end-of-summer vacations in full swing, (the) U.S. stock market face a sluggish week capped by a potential burst of activity when the government releases its August jobs report.

“‘Light volumes have made for choppy trading in recent days, with benchmark indexes flip-flopping throughout the course of the day. Activity has clustered on a few financial stocks…That trend is likely to continue into the first week of September, despite a slate of key economic data, as more investors head to the beach.”

Whether the anticipated pick-up in volume drives stocks up or down in the coming weeks is currently irrelevant; we can address that in the future.

Today I want to mention that this past week, as well as the prior week, was low volume trades and “choppy trading” has not negatively affected Secrets of Traders. We are currently enjoying a 13-day winning streak with only 2 losing days for the month. To be sure, there were slow/rough trading days (the 1st week of August), but in total we have weathered the low volume/volatility vacuum very well. Our upgraded algorithm program and the new “Reading the Tape” trades are paying massive dividends.

This past week was stellar - we enjoyed a great week! Although Monday was slow and the Virtual Trading Room (VTR) only netted a scant +1.25 gain, the balance of the week was extraordinary given the aforementioned volume/volatility vacuum. The VTR closed out the week with a +91.50 point gain, which is a gross value of $4,575.00.

Although the volume has been low in the S&P pit in addition to the overall NYSE volume, we are still getting great clues from our PitNoise service. The VTR was in a short trade Friday afternoon that had stalled and the room was preparing to cover the trade at break even. Before that happened, however, Paul from PitNoise.com called out institutional selling near 12:45pm EST.

At this time Paul called out “Goldman is 20 AT 4.50.” That’s all we needed to hear - we held the short. This meant that the Goldman Sachs broker was selling 20 big S&P contracts at 1024.50. Although this is a fairly small order for GS, we don’t know if they have another 20, and another 50, and another 100 to sell…so we held our short. Just seconds later Paul called out “Solomon is 10 AT 30.” What’s happening is another institutional firm is willing to sell but this time at the LOWER offer, which is great if you’re already short. The call is fast, but the word AT is the clue; it means they are selling. Seconds after that the market dropped swiftly, thus giving us another profit.

Putting it all together, www.PitNoise.com helped us make money in addition to our specific strategies and we love it when it all comes together. Go to this website for a super inexpensive month long trial.

Trade well and follow the trend, not the so-called “experts.”

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Notes from the Pit…for 8-31-09

ATTEMPTED DIRECTION: BUYER or SELLER
1) Rotation Seller
2) Range Extension Seller
3) Public went home as a… Neither
4) Buying-Selling Tails Seller
5) Open in Bull or Bear Range Seller

ATTEMPTED DIRECTION: Higher = Lower =Yes Neutral=

Comments: The attempted direction was bearish after a higher auction - expected. The profile after the large selling tail was truncated - or “balanced.”

ATTEMPTED PERFORMANCE:
1) Today’s NYSE Volume compared to prior day & 10-day average - expected.
Today (1.391 billion) Higher =XX Lower = Unchanged =
10-day Ave: (1.279 billion) Higher =XX Lower = Unchanged =

2) Value Area: Higher = OL/Higher=XX OL/Lower =
Lower = Inside= Outside =

3) VA Width: Wider = Narrower =XX Unchanged=

COMMENTS: The VA was OL/higher but narrower with better volume. Advancers led decliners by 2-1. Attempted performance was bullish but does not confirm the clearly bearish attempted direction.

POTENTIAL RESULTS: The Chicago PMI will be released 15-min after the open.
The market is still within its larger balance area of 1037.00/1015.00 after being slammed back under 1037.00 early Friday morning. Unless the PMI data is unexpected, we will probably stay in this “balancing” range.

Support = 1015.00, 1007.00, 998.50
Resistance = 1033.30 & 1038.00
Institutional support = none
Institutional resistance = none

Please use the pivot calculator in the “shared folder” for all of today’s pivots

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Results from Virtual Trading Room
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Electronic (ES) mini-SP 500

1) 80% sell @ 9:40am at 1030.00 = +.50 (1 lot)

2) Algorithm positions (15)

3) “Reading the Tape” positions (20) …combined Secret’s, Algo, & “Reading the Tape” total…+29.25

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Today’s Value Areas:

Use These Value Areas
for Trading on MON

ES 1032.50 / 1025.50

YM 9,572 / 9,514

NQ 1656.50 / 1636.50
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Today’s Trading Tip:
Don’t get caught up in worrying about the fundamentals, just trade the technicals!

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Chicago, IL 60604
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(312) 235-2572