isa's short term trading journal

[isatrader]

Re: Support and Resistance

Price is currently at 3.43% above the 200 bar SMA and so a short term top is likely soon maybe?

Price action is now approaching the 2% support area above the SMA. So a possible pause and rebound soon. It will be interesting to see if it can break through 2% level today as it will make me much more bearish.

 

[isatrader]

Re: Open position update

Target moved down to 1271.8

Price has moved 6 points past my entry price, and is 1.82% above the 200 bar SMA – which is the lowest it’s been since early December. So I’ve moved my stop loss to break even as there’s a good chance of a rebound, unless it’s completely breaking down. But I won’t know if that’s the case until the overnight session.

 

[pingvin123]

So waiting worked out? Congratulation!

 

[isatrader]

So waiting worked out? Congratulation!

Thanks pingvin. Is third time lucky after two failed attempts at shorting it last week. Sods law it will probably get stopped out at breakeven now. But if it doesn’t and shows further weakness, I’ll try to add to it, to make it a more meaningful position size for my account.

 

[isatrader]

Re: Support and Resistance

I’ve been manually typing into Excel the spread betting prices from the 4 hour chart of the US SP 500 Mar 11 Spread for the last few months. The purpose of this is so I can set stop losses and price targets using the spread betting companies actual prices, so that I’m not stopped out by slight variations between the futures price and the spread betting companies price.

From this I’ve been able to produce a graph which is simply the distance from the 200 bar simple moving average. I like to use this on my daily stock charts using the 200 day SMA as the baseline, as it is very useful at identifying areas of support and resistance. So I thought it would be interesting to see if it was as effective on a different time frame.

What it shows is that since the current bull move started at the beginning of December that price has met resistance between 3 to 3.8% above the 200 bar SMA and support has been around the 2% area above the 200 bar SMA. It will be interesting to see how this develops as I continue to put new prices in, but I think it shows that a strong break below 2% level will be a signal to go short.

Price is currently at 3.43% above the 200 bar SMA and so a short term top is likely soon maybe?

Relative Support and Resistance chart update. The 8pm close was the lowest it’s been since the 2nd December on a relative basis to the 200 bar moving average.

I’ve included the 200 bar moving average on the chart at 0%, so you can see the relationship with price better.

 

[isatrader]

S&P 500 Average Performance Since 1950

I wrote a post a while ago about the S&P 500 average performance since 1950 in my other journal. I’ve updated the data now to include all the years from January 1950 to December 2010 and have attached the updated chart below.

It shows that on average annual performance of the S&P 500 is 8.41% and the strongest times to be in the market is the first 86 trading days – when the market is up on average 4%; and the 208th trading day until the end of the year – when the market is up on average 4.18%. So for example the 86th trading day last year was the 6th May and the 208th day was on the 28th October.

So to break it down clearly:

S&P 500 Index – 1950 to 2010
Average Annual performance: +8.41%

First 86 Trading Days: +4%
87th to 207th Trading Days: +0.29%
208th Trading Day to Year End: 4.18%

So, the question I’m asking myself is, would it better to only trade Stocks from the 208th day through the year end until the 86th trading the next year, and then invest somewhere else from May until the end of October? Maybe I should just go to cash during the summer and have a break from trading to recharge. Definitely need to back test this data on a year by year basis to see the results though.

 

[isatrader]

SP 500 Short Exit – Mar 11 Spread

My open position in the US SP 500 Mar 11 Spread was stopped out at breakeven. Did I jump the gun on moving my stop back to breakeven? I’m not sure – it was 6 points in profit, and I think a 10 point move is a reasonable target in the S&P 500, so I think I should move my stop to breakeven once it gets past 5 points, so I don’t get caught by a whipsaw in price action and end up with a winner turning into a loser. Anyway I am a bit disappointed, as I still haven’t had a winning trade this month yet. But I’m determined not to snatch small profits in this. 10pt+ moves is the aim.

Closing trade

Entry: 14/1/11
Price: 1281.8

Exit: 20/1/11
Price: 1281.8

Points: 0

Trade Grade: C-

 

[Splitlink]

Those lunchtime American indices can be a problem, an hour before the open. I do USTech bcause it's numerically larger than the SP, around 2330. Before I folded for the day I opened a short, put a 10 point stop and 10 point limit on it. The trouble is that I did not get the full down move but, at least, it was something. The spread, out of hours was 3 points but I thought it worth the risk.

 

[isatrader]

Those lunchtime American indices can be a problem, an hour before the open. I do USTech bcause it's numerically larger than the SP, around 2330. Before I folded for the day I opened a short, put a 10 point stop and 10 point limit on it. The trouble is that I did not get the full down move but, at least, it was something. The spread, out of hours was 3 points but I thought it worth the risk.

I’d like to be able to trade the US Tech 100, but the spread on the quarterly contracts is 4 points, whereas the US SP 500 spread on the quarterly contracts is only 0.6 to 0.8 points. So I stick with the US SP 500 as percentage wise the spread on the US Tech Mar 11 is 1.74% and on the US SP 500 it’s only 0.63%, so the US Tech would only be good for a longer term position for me.

 

[Splitlink]

I’d like to be able to trade the US Tech 100, but the spread on the quarterly contracts is 4 points, whereas the US SP 500 spread on the quarterly contracts is only 0.6 to 0.8 points. So I stick with the US SP 500 as percentage wise the spread on the US Tech Mar 11 is 1.74% and on the US SP 500 it’s only 0.63%, so the US Tech would only be good for a longer term position for me.

You are with a futures broker, then? I am with Fins, an SB. I do a rolling bet. Before hours the spread is 3. Not sure what it is during hours. I'll let you know.

You are right. Fins March 11 is 4 points, too.

 

[isatrader]

You are with a futures broker, then? I am with Fins, an SB. I do a rolling bet. Before hours the spread is 3. Not sure what it is during hours. I'll let you know.

You are right. Fins March 11 is 4 points, too.

I’m with Fins as well.

 

[isatrader]

Just put on a new trade. A scalp attempt, so tight stop loss.

Trade

Long – US SP 500 Rolling Spread

Entry Price: 1283.1

Stop: 1281.7
Target: 1287.1

Account Risk: 0.03%
Potential Account Profit: 0.10%
Risk Ratio: 2.86

 

[isatrader]

Just put on a new trade. A scalp attempt, so tight stop loss.

Trade

Long – US SP 500 Rolling Spread

Entry Price: 1283.1

Stop: 1281.7
Target: 1287.1

Account Risk: 0.03%
Potential Account Profit: 0.10%
Risk Ratio: 2.86

That was quick. Stopped out at 1281.7

 

[isatrader]

Re: S&P 500 Average Performance Since 1950

I wrote a post a while ago about the S&P 500 average performance since 1950 in my other journal. I’ve updated the data now to include all the years from January 1950 to December 2010 and have attached the updated chart below.

It shows that on average annual performance of the S&P 500 is 8.41% and the strongest times to be in the market is the first 86 trading days – when the market is up on average 4%; and the 208th trading day until the end of the year – when the market is up on average 4.18%. So for example the 86th trading day last year was the 6th May and the 208th day was on the 28th October.

So to break it down clearly:

S&P 500 Index – 1950 to 2010
Average Annual performance: +8.41%

First 86 Trading Days: +4%
87th to 207th Trading Days: +0.29%
208th Trading Day to Year End: 4.18%

So, the question I’m asking myself is, would it better to only trade Stocks from the 208th day through the year end until the 86th trading the next year, and then invest somewhere else from May until the end of October? Maybe I should just go to cash during the summer and have a break from trading to recharge. Definitely need to back test this data on a year by year basis to see the results though.

I’ve had another look at the S&P 500 seasonal chart that I created last night. I think it suggests that there are two short periods where there’s a strong historical upside bias. Which is early March until the beginning of May and late October until the end of the year. So one strategy might be to trade more aggressively in stocks during these periods on the long side, and keep position sizes smaller during the sideways periods, or rotate into other areas that are relatively stronger during the sideways months?

Attached is the chart

 

[isatrader]

Re: Support and Resistance

Relative Support and Resistance chart update. The 8pm close was the lowest it’s been since the 2nd December on a relative basis to the 200 bar moving average.

I’ve included the 200 bar moving average on the chart at 0%, so you can see the relationship with price better.

The 12pm close in the S&P 500 has made a new relative low on my 4 hour support/resistance chart. But it is still very close to the previous bottoms from the last two months. So I think there’s a good chance of a rebound back into the range still.

 

[isatrader]

Re: Support and Resistance

The 12pm close in the S&P 500 has made a new relative low on my 4 hour support/resistance chart. But it is still very close to the previous bottoms from the last two months. So I think there’s a good chance of a rebound back into the range still.

The rebound didn’t happen, and I now have a confirmed breakdown out of the 2 month price range. It is a shame my position was stopped out over night at breakeven, as the price has moved down 10 points to where my target was now. Annoyingly, I was stopped out at the exact high. Very frustrating, but that’s the way it goes sometimes.

Attached is the updated relative support/resistance chart.

 

[isatrader]

Vedanta (VED) – Entry

Trade

Vedanta Resources Jun 11 Spread
Direction: Long

Entry Price: 2419.16

Stop: 2248
Target: 3090.95

Account Risk: 2.09%
Potential Account Profit: 8.19%
Risk Ratio: 3.92

This is a big position for my account and breaks my rule of a maximum single position risk of 0.5%. However, I’ve bought this as an intermediate term buy using the June 11 Spread, so I’m able to hold it until 14/06/2011.

Entry Reason
Vedanta has pulled back to it’s 50 Day EMA after a strong breakout of it’s year long consolidation pattern in December. Price managed to stay above yesterdays low and a potential double bottom is forming. It’s above it’s 200 day moving average which is currently 2300.23 on the actual stock.

The fundamentals look good as well with +75% EPS growth forecast to 31-Mar-11 and +105% EPS growth to 31-Mar-12. Recent broker upgrades by Deutsche and Morgan Stanley to 3600p. It also has a strong Quick Ratio (Acid Test) of 2.22

Below are the charts

 

[isatrader]

Article on possible SPX correction

Interesting article on a possible SPX correction soon. Here’s the link http://www.zealllc.com/2011/spxcorr.htm

 

[SlipperyC]

Re: Vedanta (VED) – Entry

Vedanta Resources Jun 11 Spread
Direction: Long

Entry Price: 2419.16

Stop: 2248
Target: 3090.95

Account Risk: 2.09%
Potential Account Profit: 8.19%
Risk Ratio: 3.92

This is a big position for my account and breaks my rule of a maximum single position risk of 0.5%. However, I’ve bought this as an intermediate term buy using the June 11 Spread, so I’m able to hold it until 14/06/2011.

Entry Reason
Vedanta has pulled back to it’s 50 Day EMA after a strong breakout of it’s year long consolidation pattern in December. Price managed to stay above yesterdays low and a potential double bottom is forming. It’s above it’s 200 day moving average which is currently 2300.23 on the actual stock.​

Interesting but risky. In my opinion, it formed a triple-top at 2550 area and on a daily/weekly chart area appears to be heading for a test of the 2000-2100 area.

Hope not for you though.

David

 

[isatrader]

Re: Vedanta (VED) – Entry

Interesting but risky. In my opinion, it formed a triple-top at 2550 area and on a daily/weekly chart area appears to be heading for a test of the 2000-2100 area.

Hope not for you though.

David

Thanks for the reply SlipperyC. It is definitely a risky one, as is a strong mover – normally a few percent a day either way. The 200 day moving average is at 2300, so if it broke down through then I think it could get to where you said. I will see how it opens on Monday, as if it opens below the Thursday low then I’ll probably get out, but if it opens higher then it’ll probably move up quickly.