This week I talked about how the uptrend is to be the focus of trading positions until a downtrend is actually confirmed via price and volume action. The S&P 500
(INDEXSP:.INX) was very close to reversing down this week, but the POMO's (Permanent Open Market Operations) scheduled largest injection of money for February of over $5 billion sent stocks soaring, jamming them back up into their uptrend.
Take a look at the normal daily injections, and then look at February 27:
S&P 500 Futures 10-Minute Chart, Zoomed Back 48 Hours
S&P 500 Trend
(Green, orange, red candles indicate trend direction.)
Short Term Trading Conclusion
Following the bigger underlying trend of the market along with the big money will keep you on the right side of the market more times than not.
Keep your eye on the POMO's injection schedule each month for days to focus on long day trades or entry points for swing trades.
Editor's Note: Chris Vermeulen offers more content at his sites, TheGoldAndOilGuy.com and Traders Video Playbook.
No positions in stocks mentioned.
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