System update 2/7

Markets can get an early boost today as upbeat numbers by Cisco Systems and a better then expected productivity report were released this morning. We are still long IWO, and the system remains in buy mode.

The following in a great article about reversal time by Prisitne.com, a great resource if your a trader.

Reversal Times
Anytime I am talking to a group of people that are not PTTs (Pristine Trained Traders), I will ask how many of them are familiar with intra-day reversal times. I estimate less than 10% of the people raise their hand on average, and those that do are only familiar because they remember reading about them in "Tools and Tactics for the Master Day Trader", by Oliver L. Velez and Greg Capra. When I tell the group that I consider trading intra-day without being intimately familiar with Reversal Times a 'huge disadvantage', most people get interested. Reversal Times are times during the trading day that the market is likely to stall or reverse the most recent pattern. They can occur because of the way Wall Street functions, and Market Maker or Specialist activity. For example, at 3:00 PM EST, the bond market closes. The remaining hour of the stock market may take a direction based on the finality of having bonds closed. Another example is during the first five minutes of the trading day, from 9:00-9:35 AM EST. During this time the public's orders to buy and sell 'at market' are being handled by Market Makers and Specialists. It is not unusual to see big swings in a stock's price during the first 5 minutes. A high or low may be set in the stock's price that lasts for most or even all of the trading day. Another example is the beginning and ending of lunch. The reason is as simple as the fact that the Market Makers and Specialists go to lunch, leaving junior people in charge to watch things while they are gone. Not only does this lead to reversal times going into and out of lunch, but also a phenomenon known as the 'doldrums', where you will find on most days, break outs and break downs will fail during the lunch doldrums. The list of times that should be watched are as follows, all Eastern Standard Time (EST): 9:35, 9:50-10:10, 10:25-10:35, 11:15, 12:00, 1:30, 2:15, 3:00, 3:30. Of these, the major ones to watch are 9.50-10:10, 11:15, 1:30, 2:15 and 3:00.