Short term factors that I analyse daily-- In general, I’m trying to analyse which influences might have the greatest impact. Here are some things I consider!!

Horizontal Support and Resistance – On a daily basis, I try to find horizontal support and resistance levels then study those to figure out if its heading for breakout/breakdown. I also try to relate this to moving averages, trend lines, and fundamental & overall technical positions of that stock. I also keep an eye how these levels are acting in short term time frames.

Bull/Bear market– Market sentiment is a major indicator in deciding a bull market or bear Market or sideways. For instance, in bear market, Market would start the day on a positive note, and then it would reverse immediately and slide in the afternoon. If you see a move during early morning but does not sustain it going into the afternoon, that’s a sign of a bear market. Bull market opens weak, close stronger.

Key Influences – It is very important to keep track of major factors that might affect the markets. The key news events are FOMC meetings; statements by Fed officials, Unemployment Report, GDP, ISM, Consumer sentiment etc .Stocks tend to be bullish FOMC reporting morning, although the day also can be very volatile. Sometimes International news can hit the markets too, we saw how European & Chinese Economies; Debt ceiling, Fiscal cliff in USA hit the market.

Correlations: Sometimes you can notice relationships between US dollar, Bond and Oil prices to the overall market. If Oil is making higher prices, the market tends to do well. When bond prices are stronger, markets tend to behave weaker. Currencies happen to have relationships too, when the US dollar is weak, the market tends to be stronger.

Sectors – I always try to figure out which sectors are leading the market and I watch for the macro factors that are contributing to the strength in those stocks. I also keep an eye on sector rotations. Normally Financials and technology sectors have to act stronger in order to have a healthy rally in the markets. Every day, I analyse Pre open stocks to see which sectors acting stronger and why.

Seasonality – It is very important to study seasonality factor and how it plays out in the market. “Sell in May and go away” is one of the seasonal patterns that most investors pay close attention every other year. Last year and this year we noticed first quarter of the year was stronger as in February 2013 markets made multi year highs. Typically, September-October happens to be very weak and November-December is traditionally the strongest months of the year. Earnings season also has an impact in the market as it increases market & options volatility.

Options – VIX is the indicator that tells me about the fear factor in the market place. Market gets very volatile as VIX moves above 17. For example, when market is strong, VIX moves lower and vice versa. Vix provides us signals about market moves. Since I trade options too, I use put/call ratios to get an idea about overall market.