c10 JWBT016-Busby October 9, 2008 11:3 Printer: TBD
Money Never Sleeps 115Another way I look for confirmation for a buy is via the action in Asia.
Once the Nikkei in Tokyo and the Hang Seng in Hong Kong open, I check
to see how they are trading. Are prices going up or down? If both the U.S.
equity index futures and those two Asian products are bullish, I look for
a spot to join the bulls. I identify my exact buying position by checking
key numbers and identifying support and resistance levels. I do not buy
just ahead of major resistance. That would be foolish. But once I identify a
good entry point, I click the mouse.
This is a short-term play for me, and I stay with it for only an hour
or so. Sometimes I may enter and exit this trade within a 30-minute time
span.
The big idea behind this play is that often the day may end down, but
the night market may attempt to pull prices back up. It is true that in a
truly down market, the bears may rule the day and the night. But there
may still be some chances for making some quick profits by going long.
Based on the trade criteria, it is obvious that opportunities for this trade do
not come around often. But when the setup is present, this may be a good
trade. When taking such a trade, be sure you have the skills to manage your
money and exit trades quickly. Prices move much slower at night than dur-
ing the day, and one may think erroneously that the odds of losing money
are, therefore, less. That is not necessarily true. It is possible to lose money
after hours. Be careful with your trading. Use stop/loss strategies and un-
derstand risk.Trading When the Sun Rises
Another S&P trade that I make is an early-morning trade. After getting a
good night’s rest, I step to my computer a little before 6:00AMand re-
view the markets. I am anxious to see if there has been any unexpected
action while I was resting. I am especially interested in taking a look at
the Dax futures. I use the Dax index both as a trading vehicle and as
a market indicator. If the mood in German is gloomy, that pessimistic
outlook will be reflected in the Dax. The reverse will also be true. Posi-
tive views of the financial markets will send prices on the Dax upward.
Therefore, a quick check of Dax prices gives me a general view of mar-
ket sentiment across the Atlantic. Since its open, is the Dax trading up or
down?
After identifying the sentiment in Europe, I look at the V-Factor. This
indicator works 24 hours a day and is a volume indicator. By this time
of the morning, the V-Factor has had more than 15 hours to collect data
for Globex trading. S&P opened its Globex at 3:30PMon the previous