Short term trading at Trade10.com- The science of trading market momentum for stocks, options, futures and bonds.

Critical Day Analysis

Our critical day analysis is all about trend reversals. We tell you when there is a high potential for a reversal of the short trend and we've been doing it since 1994 with an 80%* accuracy.

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What we do is tell our members when to expect a reversal to occur in the short trend of prices. We have better than 80%* success rate on the S&P500 Index since 1994. Because of the high correlation of US indices, our research can be applied to the Nasdaq, the Dow Jones Industrials, the Philadelphia Semiconductor Index and even the Russell 2000. You'll also notice as you browse the site that our research applies to the NYSE composite, the Value Line index as well as the US Dollar Index. We study broad measures of supply and demand, fundamental influences and market positioning to bring to our members a tool for helping traders understand the short term market and sudden shifts in market direction.

In short term trading, the ability to navigate the short term market is a key component for continued success. An equity trader learns to trade with the short trend of the markets to reduce systemic (or market) risk. An option trader learns to anticipate price reversals and volatility changes. Short term futures traders use all of the above and more.

Below is a graph of critical days on the S&P500 Index, and General Electric Co. As an index moves in short term price trends, generally, so do the bulk of stocks that compile to create the index value.

Every dot on the graphs below is given to members on average 3 days in advance. Each critical day that we generate through our research is meant to indicate a point in the markets path when a reversal of the short trend has a higher probability of occurring. Placement of the dots on the graph above or below the price plot on the critical day is for visual purposes only. The dot is only meant to indicate which days we reported to members as being critical days. The interpretation of a critical day is the only important factor. A critical day is an expectation of a reversal of the short trend of the markets. The short trend leading into a critical day is expected to reverse coming away from the critical day.

short term traders - a graph of critical day signals.

Walk through a critical day

The graphs show a price plot of the Dow Jones Industrials from Sept 28/00 to early November. The First graph ends on November 3/00, two days before an upcoming critical day on November 7/00. Our members looking at the market are expecting a trend reversal to occur due to the high rate of success in our research. Ideally a member will be using their own skills to judge the supply and demand changes, using technical and fundamental indications to confirm suspicions of a reversal, and trade accordingly.
On the second graph we see that the price action on November 6 was a bullish day, reversing the short trend so that the short trend leading into the critical day is now up. A critical day is an expectation of a reversal of the short trend that immediately precedes the critical day. In the case of the November 7 signal, given to members 3 days before, is an indication that the upward moving trend, recognized at the close of November 6 is expected to reverse direction.
On the third graph we can see that November 7 was a low volatility after a large gain on November 6 of about 160 points for the Dow Jones Industrials. The subsequent move over the three days following the November 7 signal saw the Dow Jones Industrials fall 376 points. The next day, November 13, the Dow Jones Industrials lost an additional 83 points with intra-day low a full 609 point loss since the open on the critical day.

Most recent signals

A closer view of the most recent signals. You can see the short trend immediately prior to a successful critical day, reverses coming away from the critical day. Often a failed critical day will indicate a stronger bias in the market for continuation of the trend that was in place prior to the critical day. A failed signal can therefore provide as much information and opportunity as a successful one. Take a look at tech studies to develop a sense of trend reversals and use.

Tech Studies

Comparative Relative Strength

Congestion Pattern

Consolidation