Jay's Journal

[jasont]

Hmm, I wasn't aware you used so many different elements. I don't use EMA nor pivots nor Fibonacci lines, yet seem to come up with the same levels... although sometimes, like yesterday you were spot on with 1407-1407.75 while I extended this area to potentially 1410 which had me looking for a short, instead of a long

FW, my s/r levels always are based on last traded areas. The other things such as EMA's, Fib levels, Pivots and price volume are all just elements that tell me which levels are the strongest and help me fine tune the area. Like with the 1407 support area, one could just have made it 1407-1408 but I kind of like having the quarters in there. I have been told by numerous people that the big traders stick to round numbers though.

The fact that I got the 1407 area right doesn't really matter if I don't do anything with it. I am finding I'm not trusting my s/r levels due to the period we had of extensive long slow trends that weren't paying much attention to the s/r zones. Some days the zones are in play, other days, usually strong trending days they barely make an impact. I think I need to improve my recognition of when days are using the zones well.

Depends how long ago and how many times they've been broken. I can't think of an example straight away, but sometimes several days later price finds support again there. If I have the number in the back of my head or written down, it least I'll know the potential of it.

I know what you mean about some areas just keep coming back even though they have been broken a few times. I see that a lot with the volume in the order bar. The same numbers just keep popping up. I should really outline those areas more, I probably rely too much on drawing the lines on my chart instead of keeping them in my memory bank hehe. Thanks for your great help FW, really is great having your posts on here. I hope people are learning as much as I am from your posts as it is fantastic having your input.

LiggerPig,, your right about my style suiting the use of the order bar. I use it a bit in my trading now although I don't mention it much in my journal. I guess it moves too quickly for me to get down however I want to write general comments about it so I pay even more attention to it. I often look for legitimate orders stacked in the ask column when placing a short so I have a bit of traffic as support and vice versa. I'll try putting that down in the journal.

When you mentioned commenting on the order bar and the Tick, did you mean the regular Tick chart or the NYSE Tick? The Tick I talk about in my journal is the NYSE Tick which is on a 5 minute time frame so I'm not exactly sure how I can use it with the order bar. Do you have any recommendations on how I could use it?

In terms of reading sentiment on the smallest of scales, I tend to find that patterns change in the order process. I may not look at the individual tick chart but I watch closely how the 2 and 5 minute candles flicker back and forth to see when something changes. I personally am in awe of the guys who can trade sentiment on a daily or weekly time frame. I need to have the action live to gauge how things are going, I have trouble doing it with stagnant action. I try to get a daily bias but it is far from one of my greater strengths.

Your apprehension towards trading after a break is something I share. I had six holidays last summer/autumn (your winter/spring LOL) and the same fear was there each time I returned. It helped me to take a few hours, as you did, to get back into the groove.
That said, it's always a good feeling (of relief) when you find yourself straight back in the zone much sooner than you expected. People don't change, the market still behaves as it did before you went away, just at different price levels.
Tiredness, however, is more detrimental to a trader in my experience. If you're tired you can feel out of the zone all day long, missing set-ups and not sticking to your rules.

Sheesh 6 holidays in half a year is excellent. Great to see your enjoying and making the most of life .

I guess in a way I fear losing my ability to analyze the market. I don't necessarily think it is such a bad thing and it works to my advantage. It keeps me pushing each day to work at my trading setups and also helps me keep from getting overconfident. Thanks for sharing your shared feelings in this area as I was not sure if this was common or whether traders tend to come back feeling as though they were never gone. I do hope I get back into the swing of things rather quickly, I believe getting back mid week also may be playing a role on my hesitation to trade.

I couldn't agree more with your comments on the detriment of tiredness to trading. It affects me more often than I'd like due to beginning my trading at 11.30pm here. I'm not one to make excuses so instead I'll say I should be getting afternoon naps and will probably do so once I can trade without having to work a job as well. (Thankfully I only work part time).

Thanks for your great contributions and support in my journal LiggerPig. I read some of your posts in your blog and must say you do a great job with your trading. You seem to keep similar to myself with small scalps and minimum risk at the moment. Do you also incorporate a system to let profits run a bit as well?

 

[LiggerPig]

LiggerPig,When you mentioned commenting on the order bar and the Tick, did you mean the regular Tick chart or the NYSE Tick? The Tick I talk about in my journal is the NYSE Tick which is on a 5 minute time frame so I'm not exactly sure how I can use it with the order bar. Do you have any recommendations on how I could use it?

Jay,
Sorry for the confusion, I did mean the NYSE Tick but I was thinking more along the lines of a 30 second or 1 minute timeframe.
To give an example, let's say you were following a sell-off and you noticed bids were being pulled at your support level. You also spotted a positive Tick divergence as the market approached your level, say -1200 to -1000 to -500 looking at the 30s t/f.
That's the kind of sentiment change that may be worth noting and what affect if any it has on the sell-off.

You seem to keep similar to myself with small scalps and minimum risk at the moment. Do you also incorporate a system to let profits run a bit as well?

Many of my positions are entered with a minimum 3 point target, they just don't work out. I try to minimise losses most of the time and I hate winners that look like turning into losers. I'm not too fussy about entries, being more concerned whether the action is right. I'll try to cover my costs if a position isn't working by trying to exit near one end of a 4-5 tick range.
Running profits is one of my greatest weaknesses and is one of my main reasons to keep my notes in the way I write. I want to know why I jump out of trades prematurely in many cases.
I can average one good trade per day when on form, the better results statstically coming earlier in the week. When I get close to my number of ES points profit per week objective more of my positions turn into scalps
Still plenty to do and learn here, that's why it helps me to read how others, like yourself, view the same market.

 

[jasont]

Sorry for the confusion, I did mean the NYSE Tick but I was thinking more along the lines of a 30 second or 1 minute timeframe.
To give an example, let's say you were following a sell-off and you noticed bids were being pulled at your support level. You also spotted a positive Tick divergence as the market approached your level, say -1200 to -1000 to -500 looking at the 30s t/f.
That's the kind of sentiment change that may be worth noting and what affect if any it has on the sell-off.

Thanks for that LiggerPig. It seems that I already tend to use the Tick and order bar in a similar way to what you suggest but in a longer time frame. When we are at s/r levels I often check first to see if the Tick is at an extreme like you mention above. Though recently the Tick has not been going from one extreme to the other it has commonly been going from one extreme to the neutral or zero level.

After finding something to go on from the Tick I then check the order bar to see if there are some strong orders for which I can place my stop behind. Some cases are harder than others to judge for legitimate orders but if you keep an eye on it I can pick up the serious orders from the fabricated ones.

Running profits is one of my greatest weaknesses and is one of my main reasons to keep my notes in the way I write. I want to know why I jump out of trades prematurely in many cases.

I had this exact problem with my trading on Friday. Right now I am trading a one lot system to keep risk levels low so the money doesn't affect my judgment but once I am comfortable with how things are running I will bring back the two lot system I initially began using.

Do you use a system which scales out? Mine tends to take a scalp to begin with if the market moves in my direction, usually at an easy to reach place. Then the second part of the position I let run with a trailing stop loss. It removes some of the pressure when not wanting to let a profit turn into a loss because you already have locked in part of the profits. Keep going with your journal as you look like you are doing a great job.

 

[LiggerPig]

Right now I am trading a one lot system to keep risk levels low so the money doesn't affect my judgment but once I am comfortable with how things are running I will bring back the two lot system I initially began using.

Hi Jay, IMO this is the correct approach since you are training yourself to profit consistently, experiencing the psychology of real live trading and understanding money management in practice. Walking before running
It's good to see, like me, you post profit/loss as points and not, as so many do, cash.
I learnt the hard way to keep the cash levels out of sight when I'm trading. Still, I do let the money affect my judgement but it's something I'm becoming more comfortable with.

Do you use a system which scales out? Mine tends to take a scalp to begin with if the market moves in my direction, usually at an easy to reach place. Then the second part of the position I let run with a trailing stop loss. It removes some of the pressure when not wanting to let a profit turn into a loss because you already have locked in part of the profits.

I don't BUT I am thinking of scaling out in the very near future. When I last looked to quantify whether scaling out would be useful I found no benefit. However, at that time I was swing trading.
More recently, it's become obvious, when I re-read my notes, that I ought to have scaled out of so many of my positions instead of letting the market come back close to my entries. I've found one extreme example where I netted 4.5 points and the market moved 23 points! The much more typical example though is the market moving 2-3 points and I end up with 0.5 or less.
On Wednesday I did scale out of a short position which gave me 1.5 plus 2.5, i.e. 33.3 percent more than had I just jumped out early. But, if I'd done as you suggest and used a trailing stop, it's reasonable to conclude I could have easily doubled my profit on that one position when obvious support was reached.
Without predicting the outcome of analysis which is unfinished, I know I will be comfortable with scaling out in practice and it will encourage me to sit back and let the market hit my targets.
Keep up the good work

 

[jasont]

Thanks for your great support LiggerPig. I couldn't agree more about the posting of points rather than cash. It helps remove the money factor from trading and provides, in my opinion, a better way to gauge someone's performance.

I don't BUT I am thinking of scaling out in the very near future. When I last looked to quantify whether scaling out would be useful I found no benefit. However, at that time I was swing trading.

It seems you are coming from a similar background to myself. I was swing trading with stocks and would see the benefit of scaling in but never saw any use for scaling out. In fact scaling out was taboo for me prior to taking on Futures trading.

It is hard when faced with a decent sized unrealized profit only to see it fade in front of your very eyes. It happened to me with my trading prior to futures, I went from 40% in unrealized profit to 10% realized profit in one week. That was pretty shattering especially when trading a mechanical system and your instincts tell you to close out trades but the system keeps you in. Thank you very much for your continued support and helpful advice LiggerPig, it really helps to keep the fires burning.

 

[jasont]

Trading for 16th May

Here is the journal for the 16th May:

We have seen a small rise in the overnight market from yesterdays close but nothing to call home about. We seem to be having a bit of trouble in the pre market getting beyond 1429 which may be a hurdle to get over early on. We have the consumer sentiment... not at 10am nor is it at 9.52am... it's at 9.55am. I have no idea why it is released at that time but thought it was quite humorous. That is the only significant news we will see for the day, consumer sentiment usually triggers some volatility into the market but being a Friday it will be interesting to see if people are looking to take the weekend risk.

9:35 We opened with a small gap higher at 1427.25 and came down to the 1425 area where we are currently sitting. There was a large number of stacked orders in the bid column at the 1425 area which suggests it will take a lot of effort to push strongly beyond it. The Tick has shown stocks are mixed at the open with little bias to either side. Will stay patient until something prominent appears.

9:49 It was tempting to enter a long position here but the Tick is not convincing me we have something good going on the upside just yet. I'd like some more evidence that things are looking good. We have bounced off the EMA on the 5 minute but still sit below the SMA on the 2 minute. The order bar is stacked with orders on both sides right now which usually tends to happen early on in the day and prior to news announcements. I'll stay out until we see the impact the news has on the market.

9:55 Just an interesting note: Prior to the news the Tick was struggling at the zero line, the SMA on the 13 and 2 minute was acting as a roof and the orders were stacked in favor of the asks at the 1425 Support turned Resistance area. I wouldn't trade so close to a news announcement as it can often be quite violent in it's swings but it was interesting to see the market tip the hand of the news before it occurred.

10:14 I took an ice breaker trade. I no doubt got out much sooner than I should have which is disappointing but I wanted something just to help me get back in the game. I took a long trade at 1420.25 with an initial profit target at 1421.75 and a stop at 1418.25. Trade idea was based on the support and the Tick losing momentum on the selling and a few EMA's acting as support also. Market moved up a bit and hung around but then came back. I moved my order to sell down to 1420.50 when I saw a few big sell orders. It was a major impulse move unfortunately and now I am seeing the market at 1422. Not good trade management but a good entry it seems.

10:26 I just took a ten minute time out to ponder the reason why I made the impulse trade. It in fact dawned on me that I was looking at the order bar to determine how the market was acting. I don't do that to get my entries into the market so I surely shouldn't do it to get my exits. It is a problem I know has occurred before and is the reason why I refrained from placing too much emphasis on the order bar. I saw a big order sell at the bid and it triggered a fear inside me to get out of my position. That being said, I will still watch the order bar but only the stacked orders to use as back up on an entry. Not to gauge sentiment or decide when to get in and out of trades. That is what the charts and the Tick is for.

10:40 The action has been pretty choppy since after my trade. We made an attempt to run higher that met a fast selling period. Since then we have gained a little bit of stability with the Tick moving into positive territory and seemingly wanting to stay there. I get the feeling the fast sell was big traders covering their shorts for a turn around. The Order bar isn't backing this idea though.

11:00 Market obviously wasn't looking for a turnaround as we have turned into trend down mode. The Tick has moved back below the zero line showing stocks unable to sustain the buying.

11:17 I'm starting to feel a bit tired. We have seen further decline, there was a small pause which provided an opportunity to short the market but I missed it as I was waiting for a bigger bounce to occur. The Tick is still showing a negative sentiment in the market and we look to be in a pretty good downtrend right about now. We are right at the 1415 support area so it will be interesting to see if it holds its weight. Currently there is a divergence on the lows with the Tick and the lows of the ES. It could indicate a bounce is ready.

11:26 I'm having a hard time keeping my concentration. It's time to call it a night for me. I think we could see a decent bounce here that would provide a nice shorting opportunity but fatigue has got the better of me. I'm actually happy with how things went today. The early exit from my trade was disappointing but taking the time out to figure out what went wrong was beneficial. I managed to see my downfall reasonably quickly and got back to watching the market. My analysis is getting back on track which is good. I'll work towards next week and go from there.

Daily Wrap Up

I was actually happy with today even though I made a poor decision. The reason I am happy is that I took my poor decision to exit a good trade idea prematurely and looked in depth at what caused it. I found the reason why an impulse trade was triggered whilst taking some time from the screen and then returned to the market with a better perspective.

The one trade I placed was a good trade idea and had good timing. Unfortunately I was watching the orders being traded on the order bar to find an exit when ordinarily it is not how I determine my exits. It was a good learning experience and I am pleased that I found the error in my ways. Although I wasn't still in the trade it was good to see the market still go in the trade idea direction and reach where my profit target had been. It just helped me see that I hadn't lost my market analysis whilst I was away on holidays.

Things today felt as though they were getting back on track. As LiggerPig said, it's a good feeling when you feel like your back in the game sooner than expected. I should be able to build on this next week and work towards the same feel in my trading.

Trade 1: 0.25 Win

Daily Result: 0.25 Gain

 

[jasont]

Trade Setup for 19th May

Here are the levels I'm watching for the 19th May:

Resistance

1425.50-1426.25

Support

1419-1418.25
1415.25-1414.50
1407.75-1407.25
1402.25-1401.50

My Outlook

Things still appear pretty positive according to the charts. We have bounced off the previous range highs and made new highs on the SP and NDX. The DJIA is yet to make a higher high so it does leave one with a touch of concern. I do suspect a decent dip may be necessary to encourage the bulls who missed earlier opportunities to get on board the upward action. Right now things for the longer term do appear to be good according to the charts.

On a different spectrum we have seen the VIX continue it's decline of implied volatility which appears to be causing problems for some traders. The nature of this market has changed from what it was early on in the year and I have seen it appear in my own set ups. I have been feeling more compelled to make the s/r levels shorter apart due to the days ranges being smaller. I'm not sure how long the VIX can keep up its steady decline before it has to expand a little bit. For the moment I will keep my trust in it though.

Oil is still continuing its drive upwards which is not such a good sign for the equities and inflation figures. Gold could possibly be setting up to close the divergence between it and Oil. If that is the case it means money flows are coming back into it. That also means that money flows will come out of something else which could be equities and USD.

If I look at the USD charts it does appear as though the USD is topping out its recent gains. The EUR is gaining some stability from its recent decline and so is the JPY. If this is to continue on a downward path then I would say funds are being placed back into the safe haven of gold after its recent decline. Something to keep an eye on for signs of possible economic weakness in the US economy.

My Focus

Things started coming back to me on Friday so I am going to get back into full trading with my focus again. I am keeping close attention on the Tick, 5 and 2 minutes as usual. Documenting them in the journal with a 10 minute time interval minimum. I am going to continue documenting my analysis of the Order Bar for stacked orders. I am not going to use traded orders as a means to enter or exit because I have no way of telling whether they are new positions or covering of existing ones.

My risk and money management remain the same as prior to going away on holidays. My trade management is to focus on the charts as well as seeing when stacked orders are pulled from the market. That is the way I did it prior to going on holidays and it was working well for me. I am only going to trade when I feel 100% and as always... have fun.

 

[jasont]

Trading for 19th May

Here is my journal for the 19th May:

There is no major news being released today so we are left to build upon Fridays market. The weekend action has been pretty flat moving in a 3 point range. Things may be pretty quiet today without any news to lead it. Something I will note is that recently the pre market has been lacking volatility. During September and October last year we would see some decent swings going on right now but that hasn't been happening lately. Just another sign of the decreased volatility we are seeing. Just something to note so I can adapt to the smaller moves.

9:32 Right from the outset things looked set for an early decline. In the pre market action we were having trouble pushing beyond 1426.50 and the orders have been stacking in the ask column much more than the bids. The Tick is showing stocks opening pretty hesitant to buy up big though it is very early in the day. It was one of those times I was tempted to take a pre market position but it's against my guides so was best left alone.

9:47 We've had our first bounce and move above the zero line on the Tick for today. So far it looks like we may continue Friday's late run higher but I'll keep my eye on things a little bit longer before committing to a position. Orders have come into the Bid column which is promising.

10:00 The bounce has turned into a decent sized upward move. The buying slowed down over the past 10 minutes or so which will be interesting to see if it continues higher. I would like to see a decent move down before attempting to get on board. The orders are still staying pretty solid with the bids and the Tick is indicating growing strength in the stocks.

10:10 The market hesitated with a pause before moving higher. It is a typical move we see after some quick and strong movement in a particular direction. I was looking for some good signs of a possible entry but the move lower by the Tick had me questioning if we might have a bigger move down. We seem to be sticking mostly above the zero line on the Tick which is promising for the buyers. Orders have come into both sides of the order bar which is good. It might give us a dip for another possible buying opportunity. I will watch the SMA on the 2 minute for possible entries also.

10:24 The market has made a small move lower and I was tempted to get in a trade at 1430.25 for a bounce off the SMA but held back. It could be a bad decision but I'd rather wait for a deeper move down. Right now it looks like it wasn't a great decision. I am concerned that getting on where we are would be near a possible short term top. Time for a coffee as I am getting a bit bored with the one sided action... especially when I'm not on it.

10:35 And the trend continues without a sizable retraction. The NQ has seen a decent move lower but the YM and ES didn't follow suit. I have seen a few of these types of days recently and they seem to be the single type of day that keeps me out of the game. There have been plenty of opportunities as seen on the SMA in the two minute chart but I seem to hesitate to enter the smaller pullbacks. I'm finding myself searching for other things to keep my occupied right now.

10:47 I am definitely torn right now. We are playing around the 1432 area right on the SMA on the 2 minute chart and I know we have been bouncing off the SMA but I can't bring myself to take a long trade. It's just not gelling with me at all. I want to see a further decline before getting on board and if that means I don't place a trade at all today then so be it. I'm not going to get into any old trade just because I am missing out on a decent size move up. In fact I have more than likely missed the majority of the current move up. I would like to see a move to roughly 1430 before I consider a long position right now.

11:08 I have been watching this market move sideways and was going to enter a short trade at 1433.50. Looking at the days trend I refrained from doing so and am keeping to the plan of waiting for a decent sized pullback to enter long on. I suspect it may not happen before I call it a night but at least I'll be following my guides I have set. Unless something significant changes to alter my plan it will be my priority right now. We have seen a decline on the Tick but the Es hasn't shown the same selling pressure. It has dwindled sideways and I cannot make out whether it is a pause before further ascent or if its a change of control from buyers to sellers. The NQ has continued its decline albeit a slow and not so convincing one. Orders in the bid are keeping this market from dropping right now which the Tick tells me it should be considering right now.

11:26 Well I have become a bit frustrated with this market. Not that it should be doing anything different but I am being kept out with the lack of a decent retraction from this upward move. Days like this just need to be accepted as part of the game and sometimes the market doesn't suit the way I like to trade. I did have opportunities if I used the SMA on the 2 minute chart but I distrust trends like these. Something I need to work on and find the solution to. For now I am going to call it a night because my mental ability to trade now has been tainted by my frustrations.

Daily Wrap Up

I think I'm letting what went on today get to me. The market was making a 45 degrees upward move the entire time I was watching without a significant pullback. We had a few sideways slides but no substantial move down in which for me to enter upon. I think I have let it get to me a bit because I saw opportunities to get in with the stalls in the market but couldn't commit. Today is pretty much my biggest market weakness when it comes to analysis. My stronger talents are in seeing when the market is changing and my weaker parts are judging how long a trend will continue for.

With the move upwards today, each time I saw a stall occur, an equal theory would enter my mind for a further decline. The reason I dislike entering without a sizable pullback is because I like to keep a small stop and despise the idea of possibly getting on a market top for a long position. With a sizable decline I can judge when it is running out of steam and jump on board relatively comfortable when things begin to change. With a sideways stall I simply feel like I am in a 50/50 trade.

The funny thing is that as hard as I am on myself over today, I can only give myself an 'A' for following my focus. As difficult as it was to stay out of the market and not enter one of the sideways stalls, it was best for my trading. I'm sure many people would say I missed out on some great opportunities to go long but it's just not suited to the way I currently trade. Just as many trend followers have a hard time trading choppy markets, I have a hard time trading long consistent trending markets. I do hope later on in my trading I build up the experience to determine the possible length of a trend but for now its something that I believe only market time will help me acquire.

So after all that, it was difficult for me to watch the day without a perceived solid opportunity but thats just the way some days go. It was good that I kept watch on the 5 and 2 minute charts as well as the Tick. I noted the order bar feel in my journal which was good and kept to the time intervals. No trades were placed so I cannot comment on my risk, money and trade management. I will say that I was looking forward to getting back into the thick of placing trades today but faced a market that didn't suit me. I believe that is what made it so difficult.

 

[LiggerPig]

Jay, I could pick out umpteen comments from your entry for May 19th which were so true. You were very much "in the zone" in my opinion. Yes, you could have found long entries but it would have been high risk. You identified the risk, you chose the correct course of action and avoided unneccesary risk.
If you felt it was difficult being out of the market just imagine how the shorts' felt, pain all the way up as they were forced to cover. The longs' elation was soon laid to waste later in the day, they too suffering pain when the rug was pulled from underneath them.

It may be worth your time comparing your notes from a real trend-up day with your notes for May 19th?

p.s. You weren't the only one looking for other things to do that morning LOL

 

[jasont]

Trade Setup For 20th May

Here are my areas I'm watching for on the 20th May:

Resistance

1430.75-1431.50
1440-1441

Support

1422.50-1421.75
1419-1418.25
1415.25-1414.50
1407.75-1407.25

My Outlook

After todays market my bias has changed to neutral and a slight sway to bearish. The pattern we are seeing makes the market appear as though it is having a hard time pushing higher. We had the attempt to do so but lost all the early gains in the afternoon. I don't suspect we'll turn into an extension of the downtrend we saw early this year but I do think we are due for a decent dip.

The VIX is still declining although I sense we may see a push higher on it soon. That isn't backed up by anything more than the complacency we may have built through it's decline recently. It looks as though Gold may be the one to close the divergence between it and Oil. It has begun what looks like could be a decent sized move higher off it's 200 EMA on the daily. Oil is still pursuing its higher prices which is likely to put strain on the equities market.

The USD is still looking pretty shaky right now which indicates to me we are seeing a possible switch of money out of the USD into Gold again. So things aren't dire right now but I sense we could be coming into a decent sized pullback. I get the feeling we have become too complacent with the recent upward move in the face of not so great economic results.

My Focus

I'm not really going to change my focus from yesterday. I will keep my focus on the 5 and 2 minute charts but if we see a similar day to yesterday I will look at the 2 minute chart for trade opportunities. The Tick is still a major focus and I'll keep my entries in regards to the order bar. My trade, money and risk management remain the same and hopefully I can get a trade or two in if the market suits.

 

[jasont]

Hey LiggerPig thanks for the great post. It has helped me see that my choice to stay out though painful was the best for my trading. I read your journal in regards to May 19th and must say you did a great job. It seems you had great patience waiting for the slow uptrend to finally peak and when it did you made good use of some short positions

For those wanting to know what I am referring to LiggerPigs blog can be found here.

When you say to compare my notes from a real uptrend day are you referring to one where there has been sizable dips followed by strong upward pushes? For instance the 6th May?

 

[LiggerPig]

When you say to compare my notes from a real uptrend day are you referring to one where there has been sizable dips followed by strong upward pushes? For instance the 6th May?

Hi Jay, I was thinking of days which were 'stuck up' , the ones which we find difficult to jump on the long side, which then go on to consolidate whilst we're still looking for a reversal, until continuing the move up in the afternoon, rather than reversing like Monday.
For example, comments about correlated markets/sectors like Nasdaq /financial stocks or say, bonds, can help us find ideas that consistently work to 'spot the difference', or otherwise confirm our thoughts.
You've found divergences, you want to verify whether they're useful and how to benefit from them. I've always found RUT/ER2 great for confirming direction consistently over time. Financial stocks were great earlier this year, but not so hot of late.
It's really a case of making full use of our journals, knowing what we look at and how it affects our thinking. Do we jump out of positions or refrain from entering because of something happening elsewhere?

I hope the idea is useful

 

[jasont]

Thanks for the great advice LiggerPig. I keep the YM and NQ next to me and watch for any guidance from them. Sometimes the ES will follow the NQ but recently it has not been as reliable. I have heard that the Bonds and T-Note market can often be a good guide and is something I would like to look into for such guidance on trends. I've never spent too much time watching the Russell but I'll have a look over it and see its correlation to the ES.

 

[jasont]

Trading For 20th May

Here is my entries for the 20th May:

The only news worth noting today was the PPI figures announced at 8.30am. That caused a bit of volatility and had the after hours market break through its 1423 support area it was holding. We now look as though we are going to open with a 10+ point drop. We currently are riding the SMA on the 2 minute chart downwards and it may be something to keep an eye on for further follow through. I'm willing to stay open to either side but things don't look good for the bulls right now.

9:35 We opened right near the 1422 resistance area and moved down almost straight away. There was early stacking of orders in the ask column and the Tick has remained below the zero line at the open. We are currently negotiating the 1419 support area which it wouldn't surprise me if its moved through. I'll keep my eye on the market action and try to gauge the sentiment.

9:46 The size of this bounce will be interesting. We have seen a positive move from the Tick and the orders were strong at 1418. I would have liked to enter a long trade but its still too early for me to understand the market sentiment. That and my guides keep me out for good reason. I'll see what happens with this bounce and work from there.

9:55 I was off making a coffee to come back to the rejection we saw on the Tick and the lower move to boot. I tried getting in at 1419 as it was the lowest I was willing to enter but the market moved away too quickly. Orders were pretty strong on the ask side of things and the failure to make a higher move than the open suggests a pretty weak attempt from buyers.

10:11 Its a shame I didn't catch that short position as the move has been nice. We are currently meeting the 1415 support area and slowing down the descent. The Tick is remaining under the zero line which shows a lack of confidence from the stocks. The order bar is showing stacked orders on both sides right now which indicates we may be seeing a fight put up by the buyers.

10:20 I took a short trade against the SMA on the 2 minute chart looking for a rejection off the zero line on the Tick. I entered at 1417.50 with my profit target at 1416. The market came down to 1416.75 but then started getting some strength at 1417.25. Not liking the look of the trade I tried getting out for a 1 tick gain but the market moved on me and I got caught moving my limit order up as the market kept moving and got out for a 2 tick loss. Not a bad trade just one that didn't work out. The rejection we saw at the 1415 support area may turn the market around.

10:28 Well that was a silly idea. I tried shorting the same move as I thought it might be starting to roll over and took a 1.25 loss. Entered short at 1417.25 because I saw the Tick come down a bit. That was the only thing I based the trade on and it bit me in the ass pretty much right away. Time to take a 10 minute break after losing twice on the one trade idea.

10:38 Isn't that just dandy. The trade idea was good as we now have hit the 1416 area, the timing was off. That is irritating but the only person or element that can take responsibility is myself. A lesson on patience is necessary it seems. Ok it is behind me now and time to look forward. We have rolled over and are continuing the downtrend so far. We still haven't broken the 1415 support area so we could possibly see a double bottom. The Tick doesn't necessarily agree with that theory though and the NQ and YM have already made lower lows.

10:49 Bah another attempt to short this market that ended poorly. I'm not sure what I am doing wrong here but I know it's not good. This time I shorted at 1416.50 for a dip off the SMA on the 2 minute and rejection from the Tick. The market moved instantly higher and I knew straight away it was a poorly placed trade which I exited almost immediately. This is very disappointing. I haven't had a day this bad in quite some time. It's almost as though I think the market has to go lower. I'm not factoring in the upside at all which is costing me dearly.

11:08 The sideways action chopped me up a fair bit and we currently don't look strong for a move either way. The Tick has been mixed with decent sized ranges over the zero line and the order bar showing no dominance by either side.

11:24 I think I have lost my heart for playing the game tonight. I just seem to be very "whatever" about the market. No doubt it is due to feeling irritated with my poor trade attempts. The first attempt was a good one but too early. The second one wasn't a revenge trade but I was impatient on the entry. The third trade I have no idea why I attempted to short there. It really was a poor trade idea that one. I guess I am just disappointed with my impatience tonight. After yesterday it seems I just wanted to trade anything which is a poor mentality to take with me to the market. I'll call it a day today and work on improving it tomorrow.

Daily Wrap Up

Well I have had a fair bit of time to think about todays trading and what seemed to go wrong. The only thing I can seem to relate it to is like when I play a sport and nothing really seems to work for me. That is definitely not saying the poor performance was out of my control as I am the only one who can take responsibility for my poor trades. What I am saying is that occasionally a day comes along where I don't put all the clues together in the same fashion that I ordinarily do.

The first thing I overlooked today was the big gap down. With the low volatility we have been seeing lately, the big gap down was not likely going to see a continuation to the downside without at least a sideways stall. Usually after big gaps on the open we can be prepared to see a full or partial close of the gap or a sideways range for a period before continuing the move down. I seemed to have my bearish glasses on and didn't even take this common move into consideration.

So that was my failure to see the context of the market. I can live with that and at least it is something I can improve on and isn't out of my control. My first trade even though I thought and said it was a good trade idea last night, it was not. Again I was failing to see the upside potential of the market. We had a decent rejection candle present itself right at the 1415 area support. I then chose to get on the very next candle for a short position. The trade was based upon a possible dip from the SMA on the 2 minute chart which hadn't even been reliable up to that point. It was a poorly timed trade and one I think was fueled by the fear of missing a move.

The second trade was based upon the same premise of missing out on a market move and only having eyes for the downside. I was a bit quick to jump on the trade because I saw the market begin to move down and got caught out.

The third trade had the same feel as the first one. The market had made a strong bounce off the 1415 support and made a double bottom. I then jumped on the very next candle which was the same problem as the first trade. To eager to see the market go down and I paid the price for my impatience. Again I was looking for a possible dip off the SMA on the 2 minute which still had not been reliable.

I think I brought some of my frustration of Mondays market over to today. I was paying more attention to the 2 minute chart than I should have been as the market wasn't really that slow. My whole trading the waves concept went out the window and I was looking for trades much earlier than they could develop.

So after hammering myself for my performance is there anything good I can take out of my trading today? Actually there is. I have not once felt irritated about the monetary side to my poor trading. In fact I have barely given the losses a second thought when it comes to the money. I have only been irritated with the fact that I made bad decisions with my trading.

I also believe this has shown me the importance of letting my good trades hit their profit targets. Recently I have been exiting trades that are going well, before they hit my profit target. On the days when my trading is going well I need to make sure the positions are let to run if they are holding their price or moving in profit. This doesn't mean let trades that have lost their edge hit my stop loss.

So the score I give myself for following my focus is a hard one. I will give myself a 'D'. The reason being that I spent my time trying to trade from the 2 minute chart when we weren't seeing a slow market. We were getting a few 5 minute candles to each move so the 2 minute chart wasn't necessary. Nor was it following the SMA. My focus on the charts was lapsing as well. I was looking at the charts but not examining the possibilities like I ordinarily do.

The risk management was out of whack as I was getting into positions that were a fair way from s/r levels or other decent places to hide my stop behind. My trade management was average, the first trade was exited poorly as I chased the market for my exit instead of getting out straight away. The second trade was exited as best I could and so was the third trade. They were just entered badly and didn't leave me much time to minimize the damage.

So now I go past this and move on to tomorrow which is another day. Many good lessons to learn from here as I do believe I became a bit complacent today.

Trade 1: 0.5 Loss
Trade 2: 1.25 Loss
Trade 3: 0.75 Loss

Daily Result: 2.5 Point Loss

 

[jasont]

Trade Setup For May 21st

Here is the zones I'm looking for on 21st May:

Resistance

1418.25-1419
1421.75-1422.50
1430.75-1431.50
1440-1441

Support

1415.25-1414.50
1407.75-1407.25
1402.25-1401.50
1397.25-1396.50

My Outlook

Yesterdays market action has me thinking we will either consolidate or move lower. We haven't been seeing much follow through with market moves lately so it's hard to have a strong bias towards the down side. The DJIA and SP have formed double tops right where longer term traders may have been trapped from Mid December. As I mentioned yesterday, I don't suspect this will be a trend changing down leg but more likely something to entice more buyers to the table.

The VIX still remains in line with its recent descent however I still do think a more substantial rise is on the cards. I could be wrong as I'm not a fortune teller but I do sense the downside is a little overextended right now. Oil is surging to new highs regularly without as much as a sneeze right now. Gold has also had a nice push higher since breaking the $900 mark. This doesn't make good news for the equities as a whole. The USD is weakening even though we had PPI figures that indicate inflation may be getting worse for the US economy. Reason that this is strange is that inflation may become more prominent for the Fed and steer them towards leaving rates unchanged or possibly increasing them.

My Focus

Instead of what should I focus on it might be quicker to state what I'm not focusing on after yesterday's performance hehe. Ok for tomorrow I am putting emphasis on the 5 minute chart and the 2 minute chart will only be used for guidance should I see the SMA being a formidable support or resistance. The Tick will still be commented on regularly and so will the order bar for guidance.

I'm going to make sure all my stops are placed behind prominent areas of support or resistance so that they are better protected. I will make sure I do not enter short on the first up candle after a downtrend or enter long on the first down candle after an uptrend. They are the trades that caused the poor entries yesterday coupled with too much focus on the 2 minute chart.

I am going to go back to writing down the reason for my exiting of a trade before it has hit my stop loss or profit target. I want to reduce the trades I exit without having a decent reason for doing so. I need to assess the trade before exiting instead of making an impulse decision out of fear or greed.

I'll leave the focus at that even though there are a couple more things I could include, they are the most important ones for now. I'll see how they go with my trading and work from there.

 

[jasont]

Trading For 21st May

Here is the notes from the 21st May:

Today we have the FOMC meeting minutes at 2pm. This is the only substantial news for the day but the Crude Oil inventories at 10.30am may cause a stir. The overnight action saw the market reach as high as 1421 and seemed to have found some resistance up there. We came as low as 1411 and rejected those prices pretty quickly. It seems to have gained some volatility which could likely follow through into the trading day so I will keep aware of that. Right now I just need to stick to my focus and work on what the market is telling me.

9:35 We opened pretty flat thus far and it's hard to tell the propposed direction the market is wanting to take right now. The Tick is showing stocks opening strong at the asks whilst the Order bar is mixed. The YM and NQ are also not showing much direction just yet. Will see what develops.

9:45 There are currently some big orders stacked at the 1419 level preventing the market from pushing much higher. Not sure if they will stick around and encourage the market to go lower or if they will be removed and open up the gates for a buy up. Right now the Tick remains above the zero line.

9:59 I was looking for a possible bounce from the 1415 support but the Tick isn't quite supporting the idea at the moment. The YM, NQ and ER don't appear to be turning either so I decided to stay out. Right now it's looking like a good choice. The better option right now might be looking for short trades on the bounces.

10:12 The candle at 10.05am no doubt has caused some grief for long traders wanting to enter behind the safety of the 1415 support area. I was thinking of a possible long position with the positivity shown by the Tick but refrained due to it failing to rebound well. It sort of meandered up to make the rejection which is usually suss. Right now we are playing just below that level with a battle for control.

10:24 We are moving around at the EMA's on the 5 minute chart right now which usually makes for an interesting battle in most circumstances. The Tick oddly enough has been staying reasonably strong in the face of the drop we have had. That leads me to believe the ES may have reacted worse than warranted on the downside.

10:31 Damn asleep on the job it would seem. I was looking to enter at 1416 but before I could even put the order in we were at 1415.25 and then soon after at 1414. I was looking for the weak upswing to turn but didn't have the confirmation from the Tick soon enough to get on board it would seem. Not to worry I might be able to get on a pull back.

10:35 Well I got in the pullback at 1414 with my stop at 1416. I was good until I realized the pullback was hesitant to come back down. Usually they move up and come back reasonably quickly. I panicked and jumped ship at break even. My profit target was at 1412.50 which has now been hit but not passed through so not sure if it would have been taken. That rejection candle had me thinking the market could be refusing to take the lower prices but I should have held on a bit longer instead of panicking. Good entry but an emotional management of the trade.

10:49 It sucks that we ended up passing through 1412.50 but I wouldn't have stayed on that long to reach the target. I'll deal with the problem of my last trade at the end of the day, for now I am focusing on the market. We have had a further decline and the Tick is now following suit. The NQ and ER are yet to make lower lows which has me a bit curious. It almost appears as if the ES is leading right now, that includes the stocks.

11:04 Man I don't know. I was looking at placing a long order at 1408.50 for a bounce to roughly 1411. I couldn't take the order against this strong trend. Maybe its a good thing but I don't know yet. I feel like I am just looking for anything to trade right now. Feck it, I'm going to stick to waiting for a bounce and short the bounce right now. It is risky going against this trend right now even though good support is at the 1407 area. The Tick is stuck below the zero line right now but the orders are stacked in the bid column.

11:08 I bit the bullet and took the long trade at 1408.50 that was staring me in the face . It is either going to prove to be stupid or what I should be doing. Right now it was tearing me up not listening to myself. Its currently sitting around the 1418.50 area contemplating its next move.

11:13 You know those times when you think the marketing is waiting for you to bring your profit target down? I had one of those moments. We were having the hardest fecking time pushing beyond 1409.50 that I was concerned we would drop like a brick from there. No reason to warrant that of course because the Tick was rising, orders were still holding up in the bid column and the NQ, YM and ER were all bouncing. I got out at 1409.25 for a 0.75 gain. I could have milked more from that move I just needed more balls to hold on. It seems to be what I am lacking lately and I am sick of it. To clarify why I took the long trade was the Tick was flattening out whilst we extended our downside move. Orders were stacked on the bids at 1408 and we were struggling to get past 1408-1407 support area. I placed my stop behind that area.

11:25 I love when I get 0.75 out of a 3 point move. Ok so we have bounced pretty well from 1408 and are now at the 1412 area. This is where I would suspect some resistance is met from the previous lows we blew through. Right near the EMA on the 5 minute and we are hitting an extreme on the Tick. Will see what happens.

11:40 We hit 1412 and moved down nearly a couple of points but now we have some sideways action. The Tick is building strength from the looks of it so I suspect we will have a break to the upside. We are seeing some orders beginning to stack on the bids although we do have the EMA on the 5 minute acting as pretty stong resistance.

11:43 My data stream is lagging right now so I'm going to call it a night instead of mess around restarting. Looks like I was wrong about the move higher from that consolidation. I'm not how strong this upward move is but it wouldn't surprise me if we saw a 1-2-3 bottom turn the market. I had a hard night trading tonight. Yesterday hit my confidence and was causing me to turtle up in the face of trades. I had to take the long trade to get my balls back. I would have liked to have stuck with the trade longer but I impulsed out of it again. Seems to be the winning theme since I returned from holidays.

Daily Wrap Up

I call todays trading "The Inner Conflict". That pretty much sums up what happened today. I took two good trades but they both needed me to bust my ass to get them. It is the first time I have ever wanted to use expletives whilst trading the market. Not because of anything the market was doing, that kind of conflict is futile and we always lose when we fight with the market.

The expletives were directed towards my own indecisions and impulses. The way I was watching the market was good, in fact its the best I have felt about watching the market in quite some time. I felt as though I was more in depth with my analysis rather than just scraping the surface. That probably was what spawned my frustrations. I knew I was seeing good opportunities in the market but when I was in the trades I was not keeping calm.

The first trade was really a second chance for those who missed the first opportunity to go short. We had a strong move lower and then retraced quite substantially. I made a nice entry and things were going well. However the candle I entered failed to retrace its initial rejection. At that point I became concerned we could make a hard push higher off a double bottom. I didn't panic as much as I did in the second trade but I initially thought it wasn't a good place to be. We had made a decent move into the positive Tick area and decided it was time to jump ship. I probably should have given it a little bit more time before exiting to show its intentions but unfortunately I got out.

The second trade, even though profitable, I was very irritated at. I saw the overextension from the market on the downside and things were adding up with the Tick not showing the same descent and the support area at 1408 holding its own. I saw the market rounding off nicely with orders struggling to push the market lower. We were stacked in the bid column pretty heavily. At that point mass indecision hit me, I saw a great opportunity for a trade with everything supporting my idea but the big downward move was telling me it was risky. Irritated with my recent lack of conviction I decided to take the trade and weather it.

The entry was pretty much spot on and my trade management was going good for the first few minutes. I was sticking out the difficulty of pushing beyond 1409 but the fear of turning a winner into a loser hit me and I moved my stop down. There was no reason to do so, we were still in good shape. The Tick had bounced, the orders were still stacked an rising. The other markets had made the same push higher. After I got out of that trade was when the expletives felt appropriate. I attempted to make myself a victim of the market to try and feel better but I know its not the case. The market isn't waiting for me to get out so it can keep going in my desired direction. Whats the lyrics to that song, "You're so vein"?

Anyhow, the day over all was quite challenging for me and is probably the hardest 0.75 I've ever made. I will say its progress after yesterday so that is a plus. I felt good watching the market and my entries were also good. For following my focus I will give myself a 'C'. The reason for the low score is my trade management issues. I should have written in my journal before I exited a trade, the reasons why I was bringing my profit target down. That way I could look at the problem logically and really see if the exit is warranted.

The stops were both placed behind good areas, the first being previous support turned resistance and the second being good support and stacked orders. My focus stayed on the 5 minute chart and the 2 minute chart wasn't necessary in the type of market we had. I will try to build on what I did today.

Trade 1: Breakeven
Trade 2: 0.75 Win

Daily Result: 0.75 Gain

 

[jasont]

Trade Setup For May 22nd

Here are my zones for May 22nd:

Resistance

1396.50-1397.25
1401.50-1402.25
1407.25-1407.75
1414.50-1415.25

Support

1388.75-1388
1384.25-1383.75
1380.5
1377.50-1377
1372.75-1372

My Outlook

I thought we would see a move down but didn't think we'd see the size we saw yesterday. The market to me appears as though some more downward airing out is needed. Again I don't suspect we will see a long term down trend continuation but I do think we have over extended ourselves on the buying in the short term. The DJIA has made a lower low than the previous which indicates a turnaround in the current up trend. The SP and NDX are yet to make the same move but I'm guessing it may only be a matter of time.

The VIX has made a small move higher which indicates some interest may be growing in the Put options department. We could be setting up for some increased volatility here which may prove to be a bumpy road ahead. Nothing much has changed from Gold and Oil, they are both still steadily rising, Oil more so than Gold right now. The USD looks to be in a bit of trouble right now according to the charts which is a concern. What looked so promising a month ago now seems to be in need of help.

My Focus

I want to remain focused on the same major themes as yesterday. Again I will stress writing in my journal the reason for moving a profit target or exiting a trade prematurely. It burdened me yesterday and is something I need to get on top of.

The focus will stay on the 5 minute chart and only switching to the 2 minute should the market slow down. I suspect some more volatility is on its way though. The Tick and order bar are still needing to be noted in the journal. The risk and money management will stay the same as I focus on placing my stops behind significant areas.

 

[jasont]

Trading For 22nd May

Here is the journal for the 22nd May:

The unemployment claims result was better than expected which turned the overnight market around from a strong downtrend. Not sure if it will be enough to turn the move lower from the past two days. We are currently looking at a flat market so it will be interesting to see what direction we decide to take. There isn't any other substantial news so the market will be left to itself pretty much. We've seen some resistance develop up at the 1399 area which could be important should we make it there.

9:36 Opened pretty flat and have seen a small rise early on. The Tick has opened in the positive above the zero line which may represent early optimism from the stocks. Orders are currently mixed in the order bar so its not providing too much guidance. All the other indexes seem to be following suit right now. Will see what happens with more time under our belt.

9:49 Market hasn't really moved far. It rejected prices above the EMA on the 5 minute though it wasn't a convincing rejection. The Tick is showing a slow decline. Nothing too interesting is going on just yet so its a wait and see for me right now. Hopefully some more time will produce more clues for me.

10:04 We have seen a move higher and are reaching the 1397 area resistance right now. The Tick isn't decisive in its moves right now. It appears to be hovering around the zero line with a slight hesitance to drop too far. The ES and YM have made new highs for the day but the NQ and ER are yet to do so. I'm not exactly sure of the sentiment. I can see a possible opportunity for a short but there is nothing giving me clear guidance right now. The weakness seen in the initial rejection of higher prices has me thinking we want to go higher.

10:17 I put an order in a short order at 1395.75 but was too late. The market began moving without taking my order so I pulled it. Hitting the resistance we are having a difficult time moving above it with the NQ and YM already dropping. Concern is the orders stacked at 1394 which is right near the EMA we are having trouble moving beneath. We are kind of sandwiched right now which tends to make the odds more 50/50 than anything else.

10:33 Although we had a minor push lower it didn't become a trend setter. We have broken through the resistance and are climbing higher but at a relatively slow pace. I'm keeping my eye on 1396 as a possible area for support. SMA, EMA, heavily traded area and Tick in positive shape. Will see what happens.

10:44 We have hit 1396 but its the first down candle in a uptrend so more time will be needed on this. If we fail here it could be a good indicator of trend change.

10:56 Bugger I missed the long entry. I had an order in at 1395 and it was being traded but didn't take me with it. I left it a touch too long to get on board. We have a bounce from an extreme on the Tick, Orders stacked in the bids, upward stair step pattern and the EMA. Although I was going for the long I do suspect the long side may not be the better choice. We'll see how far this goes as we may get a good shorting opportunity arise from this.

11:12 I got on a short trade at 1397.25 for a possible 1-2-3 top as the Tick was showing some decline from the stocks enthusiasm for buying. Also have the slow EMA acting as resistance previously. Got in but market wanted to move higher as the Tick made a higher move. Was struggling to decline and figured I was in a touch too early. I got out for half a point loss.

11:19 Took the second chance at the short trade and got in at 1397.25 again. Had profit target at 1396 and was pretty determined to let it get hit as we showed more promise for the decline. Market came down and touched the 1396 area and moved up. 1396 was where the fast EMA is and seemed to be providing some support. I let it go for more time but it wasn't coming back to the 1396 area. Bids were strong at 1396.25 and lower which made it hard to get through. After assessing the 13 Min chart and seeing where we were bouncing from I chose to get out for half a point gain. I was happy with the trade because I gave it time to run and the edge diminished on me.

11:32 Things are moving mighty slow right now. We came into the two EMA's converging and its a 50/50 chance of up or down right now. The Tick hasn't been providing much in the way of guidance today so its difficult to see. Just as I say this we have broken to the downside. I'm actually going to call it a night here. Market is moving slow and not ideal for my trading. I was happier with todays performance. My trades were managed much better. No gain for today but thats the way things go.

Daily Wrap Up

I was pleased with todays performance. It was a big improvement on what I have been seeing this week. Both of my entries were a touch too early for the bigger move but they were good attempts anyway. The first trade was a logical entry point and turned out to be good however the market showed me it wasn't quite ready to turn with so I took a good exit for a small loss. I am happy I looked for the reasons on the exit instead of just hitting the panic button and getting out.

The second trade was a good entry attempt again but also a touch too early. I wanted to leave my profit target where it was because things were promising. The market came down and touched the profit target price but didn't take me with it. I gave it some more time to test the area again but some orders began stacking in the bids and the Tick wasn't following through. I took a good exit prior to the market having another bounce.

My analysis of the market was much better today. I was seeing things unfold and had trade ideas I was a touch too late to get on board but its good to see they were on track. For following my focus I give myself a 'B'. I watched the 5 minute chart and paid little attention to the 2 minute chart as it wasn't showing consistency in a trend. I got out of my trades for a reason and didn't just hit the panic button. I didn't note the reasons prior to getting out though which is why I gave myself a 'B'. I placed my stops behind strong areas which was good and managed my risk well.

Trade 1: 0.5 Loss
Trade 2: 0.5 Win

Daily Result: Breakeven

 

[Splitlink]

Here is the journal for the 22nd May:

The unemployment claims result was better than expected which turned the overnight market around from a strong downtrend. Not sure if it will be enough to turn the move lower from the past two days. We are currently looking at a flat market so it will be interesting to see what direction we decide to take. There isn't any other substantial news so the market will be left to itself pretty much. We've seen some resistance develop up at the 1399 area which could be important should we make it there.

9:36 Opened pretty flat and have seen a small rise early on. The Tick has opened in the positive above the zero line which may represent early optimism from the stocks. Orders are currently mixed in the order bar so its not providing too much guidance. All the other indexes seem to be following suit right now. Will see what happens with more time under our belt.

9:49 Market hasn't really moved far. It rejected prices above the EMA on the 5 minute though it wasn't a convincing rejection. The Tick is showing a slow decline. Nothing too interesting is going on just yet so its a wait and see for me right now. Hopefully some more time will produce more clues for me.

10:04 We have seen a move higher and are reaching the 1397 area resistance right now. The Tick isn't decisive in its moves right now. It appears to be hovering around the zero line with a slight hesitance to drop too far. The ES and YM have made new highs for the day but the NQ and ER are yet to do so. I'm not exactly sure of the sentiment. I can see a possible opportunity for a short but there is nothing giving me clear guidance right now. The weakness seen in the initial rejection of higher prices has me thinking we want to go higher.

10:17 I put an order in a short order at 1395.75 but was too late. The market began moving without taking my order so I pulled it. Hitting the resistance we are having a difficult time moving above it with the NQ and YM already dropping. Concern is the orders stacked at 1394 which is right near the EMA we are having trouble moving beneath. We are kind of sandwiched right now which tends to make the odds more 50/50 than anything else.

10:33 Although we had a minor push lower it didn't become a trend setter. We have broken through the resistance and are climbing higher but at a relatively slow pace. I'm keeping my eye on 1396 as a possible area for support. SMA, EMA, heavily traded area and Tick in positive shape. Will see what happens.

10:44 We have hit 1396 but its the first down candle in a uptrend so more time will be needed on this. If we fail here it could be a good indicator of trend change.

10:56 Bugger I missed the long entry. I had an order in at 1395 and it was being traded but didn't take me with it. I left it a touch too long to get on board. We have a bounce from an extreme on the Tick, Orders stacked in the bids, upward stair step pattern and the EMA. Although I was going for the long I do suspect the long side may not be the better choice. We'll see how far this goes as we may get a good shorting opportunity arise from this.

11:12 I got on a short trade at 1397.25 for a possible 1-2-3 top as the Tick was showing some decline from the stocks enthusiasm for buying. Also have the slow EMA acting as resistance previously. Got in but market wanted to move higher as the Tick made a higher move. Was struggling to decline and figured I was in a touch too early. I got out for half a point loss.

11:19 Took the second chance at the short trade and got in at 1397.25 again. Had profit target at 1396 and was pretty determined to let it get hit as we showed more promise for the decline. Market came down and touched the 1396 area and moved up. 1396 was where the fast EMA is and seemed to be providing some support. I let it go for more time but it wasn't coming back to the 1396 area. Bids were strong at 1396.25 and lower which made it hard to get through. After assessing the 13 Min chart and seeing where we were bouncing from I chose to get out for half a point gain. I was happy with the trade because I gave it time to run and the edge diminished on me.

11:32 Things are moving mighty slow right now. We came into the two EMA's converging and its a 50/50 chance of up or down right now. The Tick hasn't been providing much in the way of guidance today so its difficult to see. Just as I say this we have broken to the downside. I'm actually going to call it a night here. Market is moving slow and not ideal for my trading. I was happier with todays performance. My trades were managed much better. No gain for today but thats the way things go.

Daily Wrap Up

I was pleased with todays performance. It was a big improvement on what I have been seeing this week. Both of my entries were a touch too early for the bigger move but they were good attempts anyway. The first trade was a logical entry point and turned out to be good however the market showed me it wasn't quite ready to turn with so I took a good exit for a small loss. I am happy I looked for the reasons on the exit instead of just hitting the panic button and getting out.

The second trade was a good entry attempt again but also a touch too early. I wanted to leave my profit target where it was because things were promising. The market came down and touched the profit target price but didn't take me with it. I gave it some more time to test the area again but some orders began stacking in the bids and the Tick wasn't following through. I took a good exit prior to the market having another bounce.

My analysis of the market was much better today. I was seeing things unfold and had trade ideas I was a touch too late to get on board but its good to see they were on track. For following my focus I give myself a 'B'. I watched the 5 minute chart and paid little attention to the 2 minute chart as it wasn't showing consistency in a trend. I got out of my trades for a reason and didn't just hit the panic button. I didn't note the reasons prior to getting out though which is why I gave myself a 'B'. I placed my stops behind strong areas which was good and managed my risk well.

Trade 1: 0.5 Loss
Trade 2: 0.5 Win

Daily Result: Breakeven

Hope that you have not told us before, if so, I'm sorry. What time zone are you using in your posts?

 

[Splitlink]

Here is the journal for the 22nd May:

The unemployment claims result was better than expected which turned the overnight market around from a strong downtrend. Not sure if it will be enough to turn the move lower from the past two days. We are currently looking at a flat market so it will be interesting to see what direction we decide to take. There isn't any other substantial news so the market will be left to itself pretty much. We've seen some resistance develop up at the 1399 area which could be important should we make it there.

9:36 Opened pretty flat and have seen a small rise early on. The Tick has opened in the positive above the zero line which may represent early optimism from the stocks. Orders are currently mixed in the order bar so its not providing too much guidance. All the other indexes seem to be following suit right now. Will see what happens with more time under our belt.

9:49 Market hasn't really moved far. It rejected prices above the EMA on the 5 minute though it wasn't a convincing rejection. The Tick is showing a slow decline. Nothing too interesting is going on just yet so its a wait and see for me right now. Hopefully some more time will produce more clues for me.

10:04 We have seen a move higher and are reaching the 1397 area resistance right now. The Tick isn't decisive in its moves right now. It appears to be hovering around the zero line with a slight hesitance to drop too far. The ES and YM have made new highs for the day but the NQ and ER are yet to do so. I'm not exactly sure of the sentiment. I can see a possible opportunity for a short but there is nothing giving me clear guidance right now. The weakness seen in the initial rejection of higher prices has me thinking we want to go higher.

10:17 I put an order in a short order at 1395.75 but was too late. The market began moving without taking my order so I pulled it. Hitting the resistance we are having a difficult time moving above it with the NQ and YM already dropping. Concern is the orders stacked at 1394 which is right near the EMA we are having trouble moving beneath. We are kind of sandwiched right now which tends to make the odds more 50/50 than anything else.

10:33 Although we had a minor push lower it didn't become a trend setter. We have broken through the resistance and are climbing higher but at a relatively slow pace. I'm keeping my eye on 1396 as a possible area for support. SMA, EMA, heavily traded area and Tick in positive shape. Will see what happens.

10:44 We have hit 1396 but its the first down candle in a uptrend so more time will be needed on this. If we fail here it could be a good indicator of trend change.

10:56 Bugger I missed the long entry. I had an order in at 1395 and it was being traded but didn't take me with it. I left it a touch too long to get on board. We have a bounce from an extreme on the Tick, Orders stacked in the bids, upward stair step pattern and the EMA. Although I was going for the long I do suspect the long side may not be the better choice. We'll see how far this goes as we may get a good shorting opportunity arise from this.

11:12 I got on a short trade at 1397.25 for a possible 1-2-3 top as the Tick was showing some decline from the stocks enthusiasm for buying. Also have the slow EMA acting as resistance previously. Got in but market wanted to move higher as the Tick made a higher move. Was struggling to decline and figured I was in a touch too early. I got out for half a point loss.

11:19 Took the second chance at the short trade and got in at 1397.25 again. Had profit target at 1396 and was pretty determined to let it get hit as we showed more promise for the decline. Market came down and touched the 1396 area and moved up. 1396 was where the fast EMA is and seemed to be providing some support. I let it go for more time but it wasn't coming back to the 1396 area. Bids were strong at 1396.25 and lower which made it hard to get through. After assessing the 13 Min chart and seeing where we were bouncing from I chose to get out for half a point gain. I was happy with the trade because I gave it time to run and the edge diminished on me.

11:32 Things are moving mighty slow right now. We came into the two EMA's converging and its a 50/50 chance of up or down right now. The Tick hasn't been providing much in the way of guidance today so its difficult to see. Just as I say this we have broken to the downside. I'm actually going to call it a night here. Market is moving slow and not ideal for my trading. I was happier with todays performance. My trades were managed much better. No gain for today but thats the way things go.

Daily Wrap Up

I was pleased with todays performance. It was a big improvement on what I have been seeing this week. Both of my entries were a touch too early for the bigger move but they were good attempts anyway. The first trade was a logical entry point and turned out to be good however the market showed me it wasn't quite ready to turn with so I took a good exit for a small loss. I am happy I looked for the reasons on the exit instead of just hitting the panic button and getting out.

The second trade was a good entry attempt again but also a touch too early. I wanted to leave my profit target where it was because things were promising. The market came down and touched the profit target price but didn't take me with it. I gave it some more time to test the area again but some orders began stacking in the bids and the Tick wasn't following through. I took a good exit prior to the market having another bounce.

My analysis of the market was much better today. I was seeing things unfold and had trade ideas I was a touch too late to get on board but its good to see they were on track. For following my focus I give myself a 'B'. I watched the 5 minute chart and paid little attention to the 2 minute chart as it wasn't showing consistency in a trend. I got out of my trades for a reason and didn't just hit the panic button. I didn't note the reasons prior to getting out though which is why I gave myself a 'B'. I placed my stops behind strong areas which was good and managed my risk well.

Trade 1: 0.5 Loss
Trade 2: 0.5 Win

Daily Result: Breakeven

Hope that you have not told us before, if so, I'm sorry. What time zone are you using in your posts? That would be GMT+?

Regards Split