Applying the tools

I don't apply the tools just to get in on a trade. I apply the tools for every aspect of trading: entry zone, entry, managing a trade, anticipating a target or a correction, taking profits etc....
Here is an example of the latest Euro run. This is where the tools tell me it is an area to possibly expect a potential correction, tighten up stops, take some profits...
I don't want to call a top or bottom ever, but I do want to know where a run may pause and correct before resuming. The tools that help me do so are Median lines, Fibbonacci retacements, price projections (as shown in chart 1). Chart 2 also shows a larger view with a potential Elliot Wave scenario with this being a potential Wave 5 (and I am not saying the end of a Wave 5).
Also take a look at the third chart GLD (Gold Trust Fund). It points to a similar area where price may correct. As we know Gold and the US Dollar have a very strong inverse correlation (one moves up the other moves down)

What's wrong with this picture?

One of the biggest banks in the world warns about an earnings drop of 60% and billions of dollars in subprime losses and the Dow rallies more than 200 points to record highs. Hmmmm...? Am I missing something here? Do I not get the whole story or do people not want to get it? Has anyone heard that the dollar is worth less than the loonie now? Are the blindfolds still on? I guess I am not getting it. Can someone explain this to me?

Cut 'em down...

Some used to call Greenspan 'Chainsaw Al'. What do we call these people? A half point cut and we've likely only tasted the froth of the subprime mess. What's next? Can interest rates go into negative territory?

Raise 'em higher

I think the Fed should raise interest rates and here is why (in no particular order):

1) Keep more stupid people from taking out mortgages that are way over their heads
2) Inflation. Oil over $80. Hello!?
3) Contain the market goldrush mentality and not clean up the greed and ignorant-driven (subprime) mess by making everybody else that had nothing to do with it pay.

What to trade?

Often traders are confused about what markets they should trade. The best way of finding out is to research a particular market and watch it. Some key points to observe are whether there is enough liquidity, volatility, times of day the issue is most active, risk/reward potential, required funds to trade it. Once all that is determined paper-trade the market to see if your methodology works. For day trading and my methodology my preferred issue is the Futures e-mini Russell 2000 currently traded on the CME, but soon to be handed off to ICE