Trading the ES (E mini S&P) November 2003

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Addendum to China's comment.

You guys are doing some good analysis. However, I lived in US for 10+ years. Thanksgiving is a BIG holiday...a lot of traders finish early today and are back next Monday. When volume is thin...futures are kicked around like a beach ball...indicators are not worth a damn...the day is a grab bag...patterns, price follow-through are unreliable. Watch out.
 
Back to tick

China

Where would you have been tempted to short. The right shoulder or the break of support.

Cheers
Andy
 

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Just realised. We have a descending triangle, an inverse H&S an then a H&S. So as long as you wait for these kind of patterns to develop in the tick and then look for weakness or strength in the ES, you should be able to anticipate direction.
 
stoploss

I'd be very cautious drawing lines on Tick from the previous session. By nature of Tick which is buy/sell intensity NOW, rather than some time-spread stochastic indicator - I do not believe its "memory" can extend to the previous session, which means incorporating a huge after-hours "discontinuity" in the analysis.

on a separate note

I'll be posting later. I think it took a low volume holiday for me to suss something that hs bn nagging me for quite awhile
 
H&S

China

Sandpiper mentioned this so I thought I try it out with the previous low. This big leg down did stop for a while at yesterdays low but was soon breached.

I have messed about with your Tick some more today. Dumped the EMA and gone to a OHLC/4 line chart. I have been looking for H&S and they appear every where. The right shoulder is the place where there seems to be be a good window of opportunity. I think it works in a similar to your method but the patterns really jump out at you. Take a look and tell me what you think.

Cheers
Andy
 

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excellent chart Stop - it may be a better way to fine tune what i think I sussed today - let's c if we r arriving at the same conclusions. I am exceptionally grateful to this low volume holiday since 2 issues that hv bn nagging me for awhile got addressed in one session - "exposed" if u like on a day like this.

dax - spot-on. days like this r a bundle of fake breaks which wud wear u out no matter if u r L or S :) Especially since loads of OTC options have expiries round these hols, they've got strikes u don't know - and as an x-option trader if u've got a client strike close to current level u may want to play your games - where on a low volume u'd easily manipulate the market.

OK - I need to apologise in advance - it'll have to be several posts.

LET ME EMPHASISE one major thing here - these findings DO NOT CHANGE the nature of our system which is based on 1st hr pivots and Tick divergence sequences. However, I believe they GREATLY IMPROVE a) the optimal entry price; and b) the optimal stop loss on an entry.

now, 2 issues:

- as we discussed b4, a "classic" sequence of Macd of Tick div vs. Tick followed by Tick div vs. ES implies 3-points. We need to learn how to enter on a 2-point top/bottom - where by definition we'll be short of a 3-point div sequence.

- we need to learn how do deal with "imbedded" tick 3-point sequences where the 1st sequence is part of a larger one, obviously the shorter one being good only for a scalp of 0.75-1.5 pts. This relates to avoiding entering too early into a tick div "in the making".

Now take a look at Tick on 26-11. Both issues fully 'exposed"
 

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answer

and here is what i think is the answer to both issues:

u watch Macd of a high-beta "leading" index as a hawk :) I still need to investigate whether NDX, Comp or Rus 2K wud be the best one - but let's take a look at Comp for instance.

26-11 morning: we r at lower 1st hour pivot at 10:30 with very slight neg divs across indices - so we already expect to buy the lower pivot from 2-3 pts below. Finally we get a 2-point bottom with Macd of Tick pos div vs. Tick and Macd of Comp pos div vs. Comp Cash. Tick pos div vs. ES is missing - as it is only a 2-point bottom, not a 3-point "classis" one. SCREAMING LONG @ 1050 worst! :)

26-11 afternoon: no trend day so we already expect to sell upper pivot. Now we get a full classic 3-point Tick neg div @ 1055.5 BUT Macd of Comp is making a higher high. OF COZ FULL TICK NEG DIV WILL BRING ES DOWN, but we take S as a scalp with a target of 1.5 pts AND MOST IMPORTANTLY STOP LOSS of only 1.5 pts above the entry. We know the neg div is still in the making on a larger scale.

26-11 late afternoon: OK here is a Q for u - we finally get a full classic longer-scale Tick neg div @ 1057.50 with Macd of Comp Cash neg diverging as well. BINGO - S again! NOW TELL ME WHY THIS IS MOST LIKELY ALSO A SCALP FOR 1.5 pts AND U HV TO RISK CONTROL YRSELF WITH A TIGHT STOP OF 1.5 pts? :)
 

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Risk control all clear.

BECAUSE over the whole span of this 3 point "classic" Tick neg div Tick itself never crossed 0 line - the Up/Down Ratio has never bn negative - hence, increased risk of inflection up and divergence failure => tight stop loss @ 1.5 pts above the entry! :D
 
China,

Thanks for the posts. Having the holiday means plenty of time to give them the attention they deserve.

Cheers again.
 
quick remark regarding those tighter than usual stop losses - of coz if the div plays out w/o getting negated - u move them lower.

best thxgiving to every1 celebrating it! :) and a well-deserved p1ss-up in a local pub/bar/club :) to all! :)
 
Happy American holiday thingy to you all members.

China and Sandpiper. Cheers guys. All info much appreciated. Really good thread has developed.
 
Sandpiper

I think I understand how you read the PREM. The directional momentum comes from either falling tops in a down trend or rising bottoms in an up trend. You then probably look for a juncture in both ES and PREM where the ES will full fill what the PREM wants it to do. ie in an uptrend, after a consolidation, rising PREM bottoms are warning of a break to the upside. You will probably see a few lower highs in the PREM. I have noticed after the third lower high, the PREM shoots up breaking the small downward sloping trend line and the ES invariable follows.That slow whippy rise at the end of the day in the ES was represented by the PREM with a ranging action and no sign of LHs or HLs.

While I am here, are there any other snippets of information regarding rules on Tick and Prem. I have made searches on the net and found a lot of stuff.

Cheers
Andy
 
Stoploss,

I used to look at the prem that way. Who knows maybe I've lost something by not continuing to watch it in that level of detail. You certainly seem to be picking it up and spotting the significance of certain patterns.

These day's I just keep an eye on the level in relation to fair value mostly.

Everybody repeatedly goes through the stage when they try and watch everything in an attempt to catch that "leading" signal and nail turns. I sometimes think it's boredom that makes us do it.

However, whenever I start cramming too much info into my workspace I inevitably lose sight of the one thing that has proved the most consistent, i.e. watching patterns develop against S/R in the ES, NQ and YM.

I find I can just about "monitor" the three futures, TICK and prem level at the same time and maintain the level of attentiveness required to spot the patterns that I like.

If I start watching prem in detail, it all goes pear shaped I'm afraid.

I've seen the 12centuryfutures stuff before. It used to be fully available freely through daytradersaction.com but that site seems to have disappeared. MER is an interesting one isn't it? I watched it for a while and undoubtedly it can be useful. Personally I doubt whether it's more useful than doing what some of the off-floor based guys do and watch the likes of GE, SUN, ORCL, etc.

However, as we discussed before, VIX, TRIN even MER merely act as indicators of "market tone". As such, they are as good a tool as anything for making sure you are not fighting against the market. They do have severe limitations though.

Take yesterday where after the rumours were largely quashed in NY, the market turned in a sixpence. TRIN or VIX or even MER (although I haven't looked at it, isn't going to prepare you for a move like that.

You also have to remember that the guys who promote the use of these tools are prepared to stand aside in the market for days, if necessary, waiting for the right set up of TRIN, TICK, VIX, etc. If that style of trading suits your personality then good luck to you. I sometimes wish I developed a longer term trading style myself ;)

Since you are on a day off ;) you might see what you can find on TIKI (DJIA TICK) as well. :).
 
Ah! Looks like I just found why my TIC isn't yours!

I always refer TICK as DJ and TICQE for Naz, my data source however doesn't get even close enough to the graphs of whichever tic your using (money.net/tick by tick quotes) nor the same MACD.

2 the board , which source do you use?
 
Hillbillie

I use $TICK which is the NYSE Cumulative Tick. I hope that helps.

Sandpiper

The way I want to play it is concentrate on chart patterns and Set ups in my ES, Quickly check to see if the $PREM is giving any type of lead and look for continuation or divergences in Chinas Tick set up. Keep it as simple as I can.

Cheers
Andy
 
hillbillie,

I've been using MyTrack this month but I wouldn't recommend them to my worst enemy.

Just had a look and money.net and they do have some strange symbols. However, NYSE TICK is .TICK NYSE TRIN is .TRIN and strangely, NASDAQ TICK is .TIKI

I say strangely 'cos TIKI is almost universally accepted as the symbol for the DJIA TICK.

hth.
 
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