A Technician's Market Perspective

03/13/2014 7:01 am EST

Focus: TRADING

J.C. Parets

Founder, All Star Charts

Technician J.C. Parets details what his pre-market preparation is like daily—what he looks for, where he goes for information, and how he puts it all together.

ROB:  I am here with J.C. Parets talking about the process of a successful trader.  I am also interested in this question, J.C., what kind of a process do you go through on a daily basis to plan, set up, take or manage positions?

J.C. PARETS:  Sometimes the technician, we have the luxury of being able to apply all of our tools not just in the stock market, but in all asset classes, the bond market, currency market, the commodities market and not just on a daily timeframe or on a weekly timeframe, but we can apply all of our tools across the board from monthly charts all the way down to intraday trading and we can really apply those tools.  I think that is a huge advantage.  We are not just looking at price, but we are also looking at momentum, seasonality, we are looking at market sentiment and it is really bringing it all together that I think is really our bread and butter. 

ROB:  Describe to me the process that you go through.   You get into the office in the morning, you grab the cup of coffee, you say hello to everybody, what is the first thing you do when you sit down to start all this.

J.C. PARETS:  I will get in social media.  I will look at Twitter.  I have curated my stream on stocks within Twitter and I trust the people that I follow.  If there is anything that I need to know that is relevant to today’s market, I know that that they will be talking about it, whether writing about it or commenting sarcastically depending on what follower specifically we are talking about.  That gives me a good idea of what happened overnight very, very quickly.  Now I am looking at all the futures charts from overnight.  I am looking at all the commodities that has been trading, gold, silver, the agricultural commodities as well, what happened in the Asian markets at that point, what happened in the European markets as well, how are U.S. futures looking based upon all of that now know information.  How is the bond market acting?  What are rates doing in the morning, so I try to get a good idea of all the global stocks, all the commodities and everything that is happening around the world, currencies as well, before I even look at my first chart.

ROB:  With the process, that focuses so much on what happened overnight and I love the thing about the social media that is great.  Do you also make longer-term forecasts or is most of it something that is sort of a forecast within a day to a week?

J.C. PARETS:  That is a great question and I think that that is really what I was saying earlier about looking at multiple timeframes.  You asked me what we are doing in the morning and that is within the context of a much broader sort of understanding as to what is happening in the market.  Yeah, I am looking at longer-term charts and really break it down to what I am doing on an intraday basis depending on looking for exits, or looking for entries and something specifically within a day or within a week.

ROB:  That is a fascinating perspective on process from a well-known technician.  Thanks J.C.

J.C. PARETS:  Thank you.

ROB:  You are watching the Money Show Video Network.

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