Big Picture Update

Feb 25th , 2011

From the August 27th 2010 low we have been bullish this market even though most have been saying it is overbought for months and months. We issue a nightly video each night and these videos are archived for all of our members. This means that if you join today you can go back and watch day by day how we have traded each leg.

It is one thing for someone to say something that has happened in the past but we save what we say and why we said it. Anyone can make up anything in this business....

So what is our outlook now?

The high that was made this week in the NQ is different than the previous highs since the August low. We have a reason for a top at the 2392.50 high. We have to wait for this high to be confirmed next week but there are odds that we start a correction from this point, especially if we get confirmation next week.

Every high on every time frame always feels like the absolute top but in reality a very small percentage of them are actually tops and this is why people go short too early. Going short too early is a losing trade on two levels.

Level 1: You get stopped as the market goes higher resulting in a loss.

Level 2: You are not making money in the trend direction where the real money is made.

Level 2 is actually the most damaging even though most people look at losses as the most negative outcome of the trade. We usually look at things differently than most people.

There is a inside extension of .618 at the 2392.50 high and this level is a level that picks up on potential turning points in the markets.

Don't believe in patterns? Don't believe in Fib's?

If you believe that pattern do occur in the markets by default you should believe in Fib's. Why? Because the fibs are what gives you the levels of the turning points and all the turning points is what gives you individual waves and all those individual waves is what equals the pattern.

If you think you can just wait for a pattern to complete and then try to trade that pattern you are wrong. Each leg of the pattern gives you odds if the whole pattern will complete to the next pattern or fail. Knowing how to do all of this is what gives you odds. All patterns do not complete the same every time you see the same pattern and why is that? Maybe it is because half way through the pattern it is telling you something that you are not seeing..

There are always two patterns that are "in play" at a specific time on the chart. It is your job to know which one has higher odds of completing. Most of the time there is one bullish and one bearish pattern that is in play. Sometimes there can be 4-5 patterns all inside of one bigger pattern. This is why trading can be confusing but to have success you need to know what questions to ask yourself at different points in the pattern and know the answer to them or what to look for so you know when the pattern is still true or is it becoming more false?

I am not here to try to convince you that patterns are 100% why the market moves like it does. Some people do not believe in patterns and no matter what you show them they still will not believe. It is these people that might think a MACD has value every time it crosses and even though deep down they know it does not have value every time it crosses. Those strategies are easy to learn but what is the point if they do not work?

Pattern, Fibs, Multiple Time Frame Trading and everything else we do takes time to learn. There are too many companies promising instant profits with the markets with limited risk but you are smart enough to know you should skip those offers. What is the good of limited risk if you always get stopped?

Why do some things work and sometimes they do not?

The bottom line is some things do have value at certain points in the pattern but all indicators are doing what? They are there to confirm the pattern, period!

So without knowing how to get the right patterns you could say that most all indicators will be wrong the majority of the time because you do not understand what they should even be confirming. It is basically like starting a book at chapter 7 , the story will be very confusing and not make any sense.

Where we are now in the market we could correct for many months if we confirm this top. Overall we still have much higher targets so the correction is a buying opportunity long term. We did a member video in Nov of last year saying that we are bullish and NQ targets are up near the 2900 level. This was when the NQ were at the 1700 level.

We still think those targets are in play but we would need a pullback in order to make it to those targets.

NFLX is one to watch for puts.

Special Bonus: For anyone who signs up this weekend you will receive the nightly video package for free for life. Also you will receive one month free in our live room and one month free on our Option Pick service.

** If you are having a hard time trading the futures you should be trading options for the bigger moves. You can make 100% in a matter of two days on a 1 point move with IWM or the QLD