All right welcome back everyone. Today, we're gon na be talking about how to trade the coming market bounce. All right, welcome back everyone.! I am Lead Trainer with StocksToTrade Tim Bohen. Ugly out there last couple days, particularly yesterday..

You can see I've got a two month chart of the S & P 500 and you see huge pullback yesterday., Another pullback today. Basing a little bit, but we broke that level.. You know you can look at my past videos.. I thought we were gon na hold.

Some support levels on the S & P and right now, ain't. Looking good., You know we had that nice kind of grind back here in late May. I mean things were looking great late. May then we could start going sideways and then the waterfall is back.

And then unfortunately well it's always tough, because I think raising interest rates is probably the right decision.. The fed probably should have done it long ago. I mean listen. Nobody likes paying more on your mortgage., Nobody likes paying higher interest rates, but part of the reason the market has been going up every single day.

For you know, 12 years now, 14 years. Basically, post 2009 is because of cheap money, `` free money, ,'' et cetera., But that really spooked everybody yesterday.. That's that big pullback, the 75 basis point rise., And then I don't think. Ultimately, I don't think it was necessarily the 75 bip increase..

It was more the comments that more are coming.. You know pretty much. Everybody knew an increase was coming yesterday, but then you know the Powell's like ``, Hey. We ain't done yet.''.

So that being said, market spooked right now., Let's get to the meat of the video.. What are we looking for to spot that turn in the markets? I got three criteria. I want you to look for and I'm gon na use Amazon as a good example.. So again I did some recent videos on Amazon..

Everyone seemed to really like them. Right now. The avoiding the Amazon pre-split video was on point. Okay..

Basically, the highest point in the last two months on Amazon was the day before the split. And check out that video. We'll probably link it below.. But again I'm pretty proud of that video ,'cause man.

So many people just came out of the woodwork. You know quote/unquote normal people that don't day trade all day, long. They're, like `` Hey, should I buy this Amazon split ?'' And I'm like `` Whoa when it's the most obvious idea, it's always a red alert.''. Now I also did a post split video that I thought - and I still stand by this statement - that we're gon na hold support here in that kind of 104 area..

You know this morning well right now, as I'm recording we're at 103.98., So I mean it's $ 100 stock. Now keep in mind it's kind of holding support. Kind of okay Right now, she's got one foot in the grave and another on a banana peel, but she's Holding for now. So anyway, what are we looking for And again I'm gon na use Amazon as an example., So you can see that big volume day post split.

Now keep in mind. The volume is a little bit skewed on this chart because remember before the split Amazon was a $ 2,000 a share stock., So you might be like ``. Why was the volume so low ?''? The volume is a reflection of the price of the stock.. I mean you know.

Ultimately, you know you buy $ 100,000 position of Amazon before the split you're buying 50 shares, so that's reflected in the volume.. But that being said, you can see the biggest trading day was the 6th which would've been the post. Split. Everybody piled in.

And you can see ever since then the volume's been fading.. Basically, we had a couple of little blips here. But to me the trend is down., Continuing down trend down trend down trend.. So what we wan na look for is the three things we're looking for volume: confirmation on that reversal.

Okay, What I wan na see is a bounce day, but not just a normal green day.. I wan na see a green day with you know trading. This 80 90 million shares like it was trading after the split, because that's the sign that the buyers are back.. You know this is something I've mentioned many many times..

I think a lot of people overlook the idea that the stock market is a market. And you know if you've been around. You might roll your eyes at what I'm about to say, but so many people just don't understand, you know supply and demand and a lot of people just you know they buy stocks'cause they're like the news or you know, ``. Oh hey, everybody loves Amazon.''.

I said it in my video.: If I don't get a package from Amazon, I start calling UPS to see if my driver's okay. I mean, like literally, I get a package every day. Literally every day, except Sunday., Okay, But you can't get married to those ideas, because What we're looking for in short term trading - and this goes for day trading and swing trading - is supply and demand imbalances.. Okay.

So if your demand is continuing to fade like it's continuing to fade on Amazon, what are the odds that the price goes higher? You know you've got an asset that is declining in value that I mean obviously somebody's trading Amazon.. I mean it's trading 40 million shares today. But what do you need to push it through that 110 level? What do you need to push it back to the pre-split area at 125? What do you need to push it through that gap to fill on earnings? You know back up into this 140. 150 area..

You need supply and demand. Imbalances. You'll see that reflected on the volume.. Now the nice thing is, you know, stocks of trade.

Has this and a lot of platforms. Do. I mean you can set alerts for the volume and you know you can set an alert at say. A hundred million shares.

Okay, That's probably high. 80 million. Okay, So I can set and alert at 80 million shares., And now I get notified., So you don't necessarily have to babysit this thing., But look for that. Look for this to retest at 80, 100 million and a green day..

Okay, keep in mind, say: there's terrible news.. You know Jeff Bezos shoots himself into space and is like ``, I'm not coming back., I'm done with earth !'' And the things gaping down to 80 bucks and trading, a hundred million shares., No no. We're. Looking for.

First green day and unusual volume to get those supply and demand imbalances. All right. Next thing to do is don't go too big. Okay.

We're talking about trading. The balance. Been a lot of failed bounces., Okay, Hey flat out flat out.. You know, I think I did a video on May 20th..

Okay And you know. Ultimately, we did bounce for a few days went sideways, and here we are lower, so failed bounce.. We got a lot of fail, bounces., So no matter what stock you're trading, whether it be an Amazon or an Apple or penny stocks. Right now, scary out there.

You know - And I know I've said it - several times., It's scary out, there. Use your position, size, accordingly.. Okay And add to a winner. Okay, These are scale in type markets right, now., Okay, You might be used to buying a thousand shares selling a thousand shares.

Buying 5,000 shares selling 5,000 shares. Right now. If your goal is to have a thousand shares of a $ 5 stock $ 10 stock, okay, whatever your account size is you're buying a hundred you're waiting for confirmation that the trend is working, strong, close., You're buying a hundred again tomorrow.. Then it gets a little shaky.

Goes sideways. You lay off., Then you get a gride higher., So you're, adding to winners, never adding to losers. One of my favorite sayings. I should have the shirt.

Okay.. A lot of you send me shirts.. Thank you by the way, with my sayings. But losers, add to losers.

Okay.. There may be no more truism in short term. Well, any trading really. Losers add to losers.

Winners, add to winners. Okay. That way, if you do, if it is a failed bounce, you got a hundred shares., You don't have a thousand., Maybe you scaled in, you got 250, but you're not max position. Size.

Test the waters scale in and look for confirmation on that. Next thing do is, is look for the overall markets for confirmation as well. Okay. When I look at the overall markets, I predominantly look at the S & P 500..

I've done other videos talking about this.. You can use the Dow. Okay.. I know a lot of people like to look at the Dow..

What I don't like about the Dow is it's just 30 stocks.. Now they move together., I mean. If you look at the S & P and the Dow I mean, if one of them's green, typically the other one's green., If one of them's red. - And you know if the S & P - is down 3 % Dow's - probably down 2.7 %, I mean they mirror.

Each other., But again the doubt, was only 30 stocks.. The S & P 500 is the 500 biggest stocks in the world., Our biggest market cap.. I think it's a better guide.. The QQQ of the NASDAQ is also a good guide., 90 % of the stocks.

I trade are NASDAQ stocks., So it's good to watch the QQQ.. So look for the indexes for confirmation.. You know again. Let's say you buy that perk..

Okay, So let's say Amazon holds 140 and you start buying. You know ,'cause you're gon na scale up to full position size around 110, but every time you get a green day, the S & P's dipping down.. That's a sign, Hey, slow down, chill out. Okay.! Maybe keep my position size, the same..

Yes, I'm glad Amazon's green today., That's my price confirmation.! Yes, I'm glad Amazon's trading, 80, 90 million chairs today, but the whole rest of the market is red. Okay.. Today's, maybe a day.. I don't add to my winner..

Never add you know again we're adding to winners.. Maybe today's the day, I just chill because the overall markets are looking shaky., So alright, everyone have an amazing day. Check out the SteadyTrade Team.. You know and you've heard me say it before.

I bet unless this is your first video.. I really think it's the best mentorship program out there. I'm doing three webinars today. Most days.

I do two. Some days. I've done four. Some days.

I've done three hour, webinars. Not every day, but I do it sometimes when it's applicable. And it's just a great you know: 3000 archived webinars.. It's really a way to get immersed in the markets.

Click that link below and we'll see you next time.