Trading ES (emini S&P) - October 2003

china white

Established member
979 12
perfect chart as always, CM! of coz once 1042 was lost in the after-hours, retested from underneath and gone - it was just down, down, down.....
 

stoploss please

Established member
780 10
Consolidation

I have always had a problem trying to work out which
way a consolidation will break out to. Does the following
sound right.
 

Attachments

  • dow 5min66.png
    dow 5min66.png
    19.7 KB · Views: 527

Skimbleshanks

1
2,325 16
All the tops of the highest bars since 16:00 on your chart are progressively lower; that indicates that the bulls are losing strength to the bears. It also gave you a very strong area of resistance. Entering a short along there would have been minimum risk, coupled with two or three areas of resistance.

The bar you show is a doji - a sign of bulls=bears, and often a turning point. That doji is sticking up above the bars on either side, showing you that the only way was down!

Often on sideways stuff it is easier to see on the 10 minute chart. :D
 

sandpiper

Well-known member
458 54
Stoploss,

Not much to add to Skimbleshanks comments, since they were bang on as usual. A quick note of what was going through my mind at the time:

01) Initial BOs from congestion are often traps. It's a much higher percentage play to wait for a second one.

02) As Skim says, the doji inside the congestion gives you an edge with your entry if you are anticipating a second attempt at the BO.

03) Another one of Skims dojis before a DB.

04) And I love these.... a return to the congestion area (high probability of some resistance here) and the retreat.

Several other useful patterns in there (for me at least). One of them being the tighter congestions within the larger one on yours and my chart.
 

Attachments

  • es 5m chart gif.gif
    es 5m chart gif.gif
    16.5 KB · Views: 524

stoploss please

Established member
780 10
Todays gap play

I do not trade the first half hour. Its a rule I have written and one I have decided not to make any exceptions to. Anyway. here is todays gap play. Would this be right.

Cheers
Andy
 

Attachments

  • dow 5min67.png
    dow 5min67.png
    24.4 KB · Views: 483

stoploss please

Established member
780 10
Question,

With the gap being filled on the first peak, would you have covered there or wait to see how the first trough develops.

Cheers
Andy
 

Skimbleshanks

1
2,325 16
I would have covered there on the first peak - she also stopped at 1030 which is a psychological number. And then shorted, and then gone long until the double top (easier to see on the Dow today) and then down to the double bottom, etc.
 

china white

Established member
979 12
Bulls vs. Bears

U may recall I was talking about dipping to 1021 - 50% Fib retracement on ES. As always :cheesy: the mrkt took a mickey at my faffing and bounced right off 50% retracement on Comp and SOX (which is also their 200 ma 60 min sup) with spooz hanging well above. I am attaching SOX graph as it was the biggest laggard today, hence its bounce is more meaningful.

As such, today was good for the BULLISH case.

As for the BEARS' case, it does not take too much imagination to see today's action as a major bear flag on all indices.
 

Attachments

  • sox2310.jpg
    sox2310.jpg
    58.3 KB · Views: 435

china white

Established member
979 12
how yesterday Ugly Grizzly cud be predicted

I spent quite a bit of time thinking about that last dip in the final minutes of Tuesday's action - mentioned in "How do they know?" post and discussed in some other posts. I can clearly see now why my C&H call on Tuesday's night was doomed to go belly up.

Look at volatility readings. No upside on Tuesday whilst front-end SP500 (VXO), same as SP100 (VIX) goes bust, B/D from the triangle and staying there for the whole day. That last dip was the sharper eyes amongst us who figured that in such a set-up u either dump the futures at the close or buy VXO futures (or do both). Voila! :cheesy:

where from now? 20 VXO is a crucial level, funnily on untradable VIX u'll see an expanding tri, with higher highs tested on the upper boundary. My take is that we'll test 50% Fib retracement (21.4 VXO) very shortly, perhaps tomorrow.

Which means there'll be more downside pressure. However, we just have to c how price will react to a 7% increase in volatility reading (if that happens). If selling-off is limited, BUY ES futures or SELL VXO futures, imo.

Of coz we can easily lose 20 again and retest Tuesday. same logic applies (in reverse ;) )
 

Attachments

  • vxo2310.jpg
    vxo2310.jpg
    44.1 KB · Views: 453

china white

Established member
979 12
Read this if u r a TICK trader!

quite straighforward day with up to 14-16 pts available. If u cud only crack the midday puzzle :cheesy:

At 12:52 clear ND recorded on TICK and its momentum. I took it as a fake B/O, and reversed to short @ 1030.25. Blimey wrong - out flat. 13:28 - an even more pronounced ND, short again - out at a loss of 0.5 pts. Of coz, those WERE fake B/O but the big money was not YET legging over smaller fish on those attempts. Which led smaller fish to stage the 3rd try. U can c downward sloping res line B/O on both TICK and its momentum. Perfect chance to go long, I did not, missed out on 2-2.5 pts, but even more importantly, cud've missed out on a big move, it it had been one.

Finally comes 1034 - ND only on MACD of TICK, test of 20 ema (60 min ES) and 40 ema (5 min SOX). Tricky. The answer somes from TICK registering HOD @ above 1000 and reversing - expect SELL within 10 min. + a hint from pos time frame (see graph)
 

Attachments

  • tick2310.jpg
    tick2310.jpg
    45.5 KB · Views: 464

sandpiper

Well-known member
458 54
Stoploss,

Noted Skimbleshanks comments about the gap open trade. God, how I wish I could trade from the dark side ;). As Skim said the DT/DB were so much more obvious on the YM/DJIA. I ended up with some of the same "entries" as Skim for different reasons.

02) Traded right into the congestion area from yesterday (co-incidentally floor traders pivot as well). I liked the entry there yesterday. No reason not to like it again today. I try not to hypothesize too much as to "why" the market consolidates where it does. I just assume that there is an important impasse there and make a note for future reference.

01) Sorry about the sequencing... DB on the YM/DJIA, more significantly for me, it was a bounce off the ES opening range.

03, 04) A congestion sets up more or less the same way as yesterday. A trap below (just) a trap above (seemingly) and then rising bottoms before it breaks out for the second time upwards. (Again waiting for the second time out pays dividends, sure you miss some trades but I can cope with that). Almost forgot (kind of subconcious appraisal of some of these set-ups I suppose), the other thing going in this trades favour is the fact that there is a decent probability of getting grail buyers in both the 5m and 15m time frames helping you out. I don't use the emas for entry (and I know this thread is about trading without indicators) but I like to know where the people who do use them are likely to be.

05) Price breaks down to trade back at the base of the previous congestion without trading through it. Same as yesterday, a setup I love (simply because I know where my stop is going to be).

Won't say anything about 1034 since it's outside the focus of this thread.
 

Attachments

  • es 5m chart gif.gif
    es 5m chart gif.gif
    21 KB · Views: 496
Last edited:

2468steve

Experienced member
1,076 39
CW,
thanks for analysis.Would just like to clear up VIX and VXO .Am I correct in saying that the new Vix is now based on S&P 500 Options Prices. (Previously, the original-formula VIX was based on prices of the S&P 100 (OEX) Index Options, and CBOE will continue to calculate and disseminate the original-formula index with the ticker VXO.)
Thanks again
cheers
 

china white

Established member
979 12
no mate the other way round. VXO is based on SP500 front-end volatilities, VIX calculation is unchanged and still based on 5 puts+5 calls on OEX cash close. That was done on purpose in order to store the huge historical info that VIX has accumulated.

However, note that VIX is an untradable index, hence it is a non-speculative number. VXO can be manipulated by direct trading of VXO futures. We did not have that b4 when I was trading options on Spooz, and I can already c what games option boys r gonna play having a direct future on volatility.
 

eminem

Active member
185 1
China, on your TICK analysis you mentioned time frames, what are these based on and how are they calculated?

Thanks.

PS I thought the new VIX was now based on the SP500 and VXO was based on the old OEX :?: :confused:
 
Last edited:
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock