How 'They' Try To Fool You

Yesterday (and overnight) was a good example of how traders get fooled in the market, over and over again. Wednesday, after a good bounce on FOMC-minutes, the market made new highs for the day and it looked like a short-term bottom was in. But in the last hour of the session, the market went back to new lows for the day (and for the month actually). After the close, we even got more new lows, although not that much lower. And look at today's action. We're closing even near yesterday's highs and look good to go higher in the near future.

Bottom line: try not to pick the exact bottom, it's too damn hard. Scaling in when you think the bottom is in, is a better approach and will keep losses to a minimum. Remember, even if this is only a short-term bottom and only good for a 2-3% bounce, you can still make good money when you handle your stops right and don't get to aggressive by scaling in too big from the beginning.

5m-chart SPY:

Daily charts DIA, SPY, QQQ and IWM:

Euro, oil, metals
The euro bounced nicely on 1.33 and looks ready to attack 1.34 again.
Oil finally bounced and closed with gains well over 1%. Now trading right above $105.
Metals also moved higher between 0.5% and 0.8%.