Friday 03/27/09 - Discipline is Key

Closing the charts early today (12:03 PM) with a nice gain of +$740.90. I'm not too excited since I did put on 5 contracts on one of the trades which provided bulk of the profit. I don't normally add to a losing position but I did just that today; I had a hard-stop 1 pt below support, and added to the position when it went against me, and when it went in my favor. Just wanted to experiment with a little more size (I was trading up to 12 contracts in my real $ account back in 2004 so 5 contracts is not out of the question in the real $ account). The key takeaway from today is to stick with the trend, and patiently wait for the market to show its hand before entering a new position. I jumped the gun on my earlier short trades, but was quick to bail for break-even or a tiny gain since I realized I wasn't being disciplined and was entering early before the market provided confirmation. Once I got confirmation, I entered and exited for a quick +2 point gain. Probably should have held on to it for a bit longer, but I have been coding all morning for that IT project which I have to push to Production today or tomorrow, so need to get back to that.

The Blog will be quiet for 2 weeks since I'm leaving this Sunday on a 2-week trip to Geneva, Paris and Dubai. I'll be back in the good ol' U.S. of A on Sunday April 12th, and will resume the regular postings later that week. See ya!

ES 610-Tick bar Chart (Morning Trades)


Open/Unfilled Gap Above at 827.25 - Price came down so close to the previous open gap at 808.75 that I consider that gap filled at this point.


ES/$TICK (3-Min) - Low Avgerage $TICK readings through the early morning climb up indicated weakness.


ES 15-Minute - Yesterday's chart indicated the 808.75 area as support, and it proved to be support today. Low of day was 809.50, at which point price bounced 10.50 points.

Thursday 03/26/09 - Some hint of progress

I lightly traded the PM session today (was busy and distracted with non-market related activities most of the day). I think I did a good job of putting biases aside and trading with an open mind today. I mentioned in yesterday's post that I was expecting continued up-side, so I went Long at 818, slightly above the mid-point. My target was 828 but at the time it looked like price was hitting resistance at 824.50, so I exited at 823 for +5 pts. I should've re-entered long on a pull-back but price often re-tests previous S/R so I stayed out. After price topped out at 829, I scalped it to the short-side for some quick wins. I was aware that the major trend was UP, and price was above the mid-point, so kept the short scalps tight. Support was developing at the 823 level, and I figured if we broke 823, price would re-test the 818 level so I scalped some more on the short-side but didn't really hold out for any large gains due to the underlying strength in the market. I should have gone Long in the late afternoon once price broke out above 823 but I was busy with other stuff and didn't want to give away the earlier gains. Ended the day with a +7.50 pt gain.

Some thoughts for tomorrow. XLF closed above mid-point, so we're starting to see some participation from the financial sector, but not nearly enough. XLE closed below its mid-point, which isn't a good sign for this rally. I would like to see participation across tech, financials and energy. We also now have an open gap at 808.25, which could very easily get filled tomorrow or early next week. I'm aware of the open gap, but am not going to put too much thought/value in the gap-fill play just yet.

On to the charts...

ES 610-Tick bar Chart (Afternoon Trades)


Open/Unfilled Gap at 808.25



ES/$TICK (3-Min)


ES 15-Minute

Wed. 03/25/09 - V Reversal

I had a lunch meeting with a recruiter so wasn't able to trade the morning. I tried trading the afternoon session but TradeStation was not accepting my orders (order would just sit in the queue). I tried shorting 799 before the flush down to 787, but TS refused to accept the orders, so I just sat and watched. I was looking at the 15-min ES chart and noticed that price was holding above the .618 retracement. I was expecting price to bounce back to the .382 retracement in the 798 area, and close above 800, which it did. In the past few months, we've become used to seeing sell offs in the afternoon, but now we're beginning to see some strength come into the market, indicative by today's late afternoon recovery. From reading other blogs and trading sites, everyone and their mother is expecting over-head resistance, and the term "over-bought" is being mentioned a lot. The recent market action is indicating further up-side at the moment. So no trades on my side today, but I still marked up the charts for my own education.

Looking at the 15-min charts, the technology (XLK) and financial (XLF) sectors are looking OK, but there seems to be a lot of selling pressure in the energy sector (XLE), and I'm afraid that sector may hold the S&P back from a strong up-move. I'm not an expert at sector analysis, rotation, or anything else market-related for that matter, but that's just what I'm perceiving at the moment. If 818 holds tomorrow, we could see another short squeeze take place pushing ES above 828.

On another note, I probably won't be trading much tomorrow or Friday since I'm flying out of town this Sunday, and have to finish up a couple of IT projects before then.

On to the charts...

ES 610-Tick bar Chart (Morning Price Action)


ES 610-Tick bar Chart (Late Morning Price Action)


ES 610-Tick bar Chart (Afternoon Price Action)


ES 610-Tick bar Chart (Late Afternoon Price Action)


Gap filled by 1:00 PM


ES/$TICK (3-Min)


ES 15-Minute - Price remained above the 200 EMA.

Tuesday 03/24/09 - Consolidation

In hindsight, almost every trading day looks like it was such a piece of cake to trade, when we all know, things are very different in real-time. In real-time, today was a shitty day; plain and simple. Lot of chop and two-sided trades; lack of momentum, lack of continuation on trend moves, and just overall a bad environment for MY style of trading.

I was up till around 2 AM last night working on non-market stuff, and I know I can't trade while I'm sleepy, so decided to sleep in. I got to my screens around 11 AM, and there wasn't much going on, so scalped it short and then long for +2 pts. I should've held the long trade since price was finding some support around the 808 area (I was long from 809), but at the time, market was looking weak, so I bailed for a point. After I exited, price shot up 3-5 points in a hurry, at which point the risk/reward just wasn't there for me to buy, and I wanted some further confirmation before entering the market again. This brings us to the afternoon trades. Price couldn't reach yesterday's high, which was a warning sign that bulls were losing momentum, but I didn't want to enter short either since price had made a higher high, so I just sat it out. Then price started breaking down, and I entered short and was stopped out for 3 ticks. I got chopped up a bit trying to figure out the direction the market wanted to go, and it was quite frustrating. The market finally showed its hand around 2 PM when it broke the mid-point, but I wasn't at my desk to do anything about it. I had to step away, and told Matt via Yahoo IM that now that I was out of my short, ES would probably tank. and that's exactly what happened. I was a bit paranoid from the lack of follow through I experienced earlier so just took one more quick scalp to the short side when I got back. I had a feeling we would break the 1st hour low since they couldn't even push price back up to the mid-point, but I was unable to capitalize on the idea.

Ended the day with a +$250 gain, via a 67% win rate and a profit factor of 6.11.

For tomorrow, I'll be mindful of the 800 area, which held as support today. Below 800, I'll be expecting support around 790, 784, and then 774. I think price could come all the way down to the low 760s again (thus filling the open gap at 763.75), and still retain it's bullish structure.

ES 610-Tick bar Chart (Morning Trades)


ES 610-Tick bar Chart (Afternoon Trades)


Gap filled by 12:30 PM


ES/$TICK (3-Min)
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ES 15-Minute

Monday 03/23/09 - S&P up 54 pts! Really?

Given the last couple of week's price action, I was cautious trading to the short side (obvious by my consistent effort to BUY last Friday), but I wasn't bullish enough to go long as often as I should have today. I scalped for +2.25 pts to the short side right off the open due to weakness in XLF at the time. I then entered a short position at 792.25 because ES broke the 791.50 area. What I failed to notice was that ES broke that level just by a TICK, and it cost me -2 pts! I should have waited for a decisive break and then entered on a retracement. Lesson learned (again). I corrected that mistake by going Long at 794 on the .618 retracement of the next up swing. I had to leave the house for a bit, so exited early for +2 points (target was 800). When I returned to the screens around noon, price had been drifting down/sideways, and was below the 50% level, and overall looked pretty weak, so I entered short at 797 but was stopped out at 798.75 (-1.75 pts) two minutes later, on what looked to be a stop-run. All the indicators were pointing down, so I re-entered short at 797.25 and covered at 794.50 for +2.75 pts. I had to attend a birthday lunch so closed down a little past 1 PM with + 3.25 pts on the day, with a profit factor of 1.76

ES 610-Tick bar Chart (Morning Trades)


ES 610-Tick bar Chart (Late Morning and Afternoon Trades)


ES 610-Tick bar Chart (Afternoon Price Action)


Open/Unfilled Gap from 763.75


ES/$TICK (3-Min)


ES 15-Minute - Price could easily retrace to the 791 area and still be in an up-trend.