Nov. 13, 2006: Up

The market had one large move in the morning and that was about it for the rest of the day...yaaaawwwnnnn! Somebody wake me up when they're done with this crap hehe...

Ok, so I expected a retracement to the upside and that took place. Now what? Well, I'm looking at the indixes for clues and the ony ones that provide any clues are Trans, Dow, and Sox. Tuesday should witness a definitive move either to the upside or downside (duh!) with very little room for consolidation. The news releases might do the trick. COMPX is up against 2400 level so is the Dow with 12200 and those aren't easy levels to take out. I'm favoring the short scenario at this point. Will confirm when the market opens.

Nov. 10, 2006: Cnsld

The market consolidated the entire day and the indices behaved differently. YM &ES had lower lows while NQ & QB had higher lows going into the latter part of the session. I expected some strength then weakness to take place but the opposite happened. One could've stayed on the sidelines or taking longs based on breadth.

Looking at the patterns I do see some strength and more consolidation taking place as marked on the longer tf charts. Monday mornings are the trickiest along w/Friday afternoons so no trades till the afternoon session. By looking at the Dow chart there's a good possibility for a retracement to the upside but I don't think it'll exceed the recent hi >12200 level.

Nov. 9, 2006: TD (Down)

As mentioned in yesterday's entry I expected the market to retrace to the downside and that's what took place. It was a straightforward TD across the board. Market breadth, especially VOLD, didn't indicate such reaction. Nevertheless, the patterns on them were clearly on the -ve side. All indexes were trading below their intraday pivots which meant no long trades.

I was out and didn't trade today, but the 'woulda shoulda coulda' trade setup would've been a short on the second lower hi hump. This is one of the easiest setups to recognize and execute.

The charts (especially BKX) indicate more weakness in the upcoming session. I wouldn't be surprised if there was consolidation early on then continuation to the downside. The Fed are speaking later on so that will factor in afternoon action. No trading for me on Fri. afternoons.

Nov. 8, 2006: Gap down & Up

The market sold off in globex but rebounded and chopped during day before a late b/o. I expected a consolidation and the action resets price levels to '0' compared to previous session. It should be noted that prices held up well in the face of a Dems victory and that says something. What does it say? No idea lol....

As far as trade setups I took the short around noon time and left afterwards so the b/o later on was a good opportunity missed: was a nice tri b/o accompanied by breadth. I have misjudged the pattern on Sox and it did hold support vs. tanking further down as I suspected.

As for tomorrow's session, I expect some retracement to the downside. By looking at the Dow & Sox, and ER for that matter one would expect a solid continuation move to the upside. Maybe.. but some resistance should be expected at these levels given the recent runup. Will re-evaluate based on the reports released before morning session.

Nov. 7, 2006: Smoke and mirrors

Ok, I'm back after a long summer (& Fall) break.

The market behaved like I expected - yesterday's action was all smoke and mirrors that one could smell it few miles away! Today I walked in with a clear short bias (Thanks J for confirming my bias :) ). Yes, early morning runup threw me off a bit but after looking at breadth and my newly minted (highly secretive) shem-indicator hehe confidence grew that this upmove was manufactured. Shorts were entered at multiple points and worked out well. A long trade was thrown in there for good measure (I call'em airhead trades) and didn't work out of course. Lesson learned: 'Stick to the f***** plan! Thanks you.'

Pls. note that we've had a 'V' on the Dow which revisited previous hi. What makes Vs bearish is the speed by which the second leg accended. Any time, it runs up hard to revisit a cautionary flag should be raised.

Ok, so it's elections time back home and the Dems might be taking over. As for impact on market, it usually tanks when them Dems move in da house. I'm going for a consolidation on Wed. with fireworks on Thurs. & Fri. since there're major news coming out on both days.

June 5, 2006: TD (Down)

Ok so the market went down, big deal. Today's observation is on the 3 short setups. The 1st entry happened when Vold was still in the zone so this means quicker profits. 2nd entry when it tagged the underside of the zone which means 'wait a little longer on taking profits'. 3rd entry is the ideal one since Vold and the Adds are completely out of the zone - translation: sit tight and enjoy the ride!

How about the very reliable pattern on ES?? I drew the inverse pattern to show the bullish side as well. The bullish one took place few days ago.


Ok, same old story. Everything is moving in unison. This is getting to be boring (hehe..). 1.30 level on Euro is the 'level' to beat. The pattern is still bullish unless 1.27 is taken out. If that happens it'll be a straight flush down to 1.22-23 area and a major dbl. top will be in place. 

June 2, 2006: Cnsld

The market didn't do much today other than consolidate at top of range.


Euro and currencies in bullish patterns on higher tfs.

This is the chart I'd follow if trading Euro & other correlated currencies. The bullish consolidation awaiting b/o past 1.30 level. Wow!! 

June 1, 2006: TD(UP)

I don't know what to say to those who can't trade TDs successfully. TDs are the easiest days to trade w/size as well. The probabilities are stacked in the trader's favor. Look at curved cnsld on AB - as perfect as it gets! Eyes have to be trained on recognizing these simple patterns.

Look at how the N pattern resolved to the downside in Globex - very bullish, especially that BKX held 108 and rallied at the open above ma. This is a bullish sign for an upday. Happened many times before.

Time for a pullback and time for me to take a nice break till October. I think I'm done for this part of the year. Done very well and need to spend some time resting and planning for summer vacation.


Look at how currencies & metals correlate! Ditto for Crude oil. Now I can see some stuff on this bunch of markets that make sense and add a nice edge. How about that counter move at 8-10am? So it seems that the US traders are taking profits from earlier parts of Globex & Euro sessions. Something to keep an eye on.

Take a look at the waterfall on Gold - again eyes need to be trained cuz these patters are very reliable. That's what's called pure market action and it adds a lot to a trader's bottomline. I love it!!

May 31, 2006: Cnsld

Market breadth was +ve all day so no shorts. Dow hovering around bull zone. The W patterns are underway so are the semis wedge indicating upside action. What bothers me is the N pattern on ES & NQ which usually resolve to the downside. 108 support level on BKX is the area to watch.

Everything moved in unison after a pre-market weakness on currencies, gold, and oil. Further confirms the correlation I've been talking about. BP & JY are usually better indicators than Euro in signaling nice swings. Gold broke the daily bear flag on very little volume. 

May 30, 2006: TD

The market wasn't kind for the shorts today and on the daily looks like it'll consolidate around this area. Trade setups marked on chart.

I'm still on a break and won't trade this week as well. I need to rest up.


Nice H&S on Gold. Watch how the currencies and Gold rallied in unison - further confirms the correlation. The 8-10EST is an interesting period.

Looking at currency charts it seems that any rallies in the Globex & European markets up to 8amEST are subsequently sold during these 2 hours. Can it be that traders take their profits during that time? Don't know but something for me to follow. 

May 26, 2006: Upward Cont.

The market continued moving past the bull-zone on Dow. I'll resume trading this coming week.

Again let's look at how gold was behaving in relation to currencies. Definitely weak in addition to Euro within ascending channel. Ditto for crude. Notice TL on bottom of range on Gold. 

May 25, 2006: Stairs (UP)

 

May 24, 2006: Cnsld (Hook)

Ideal setup on chart. Action of breadth in relation to the zones should be noted.

How about that 'fugly' multi-day pattern on BKX. Believe it or not I've seen it before!





What were the metals doing when currencies wanted to b/o from 240 H&S pattern? They were selling off!! Look at (highlighted) fake b/o on currencies then what happened subsequently. Yes, exactly! Ditto for crude. There's correlation and metals seem to be wiseman unlike the currencies that keep behaving like an 18yr.-old. There're consistent occurences that I'm seeing on metals & currencies and I shall post in due course. 

May 22, 2006: Cnsld

Mondays are usually predictable - mostly games played in the morning that wind up w/zero gain/decline by the end of the day, i.e. cnsld.















Gold hitting support on daily - prior triangle/b.o. point.












B/o aka continuation on Euro 120min. 1.30 will prove challenging.









2 b/o scenarios on crude 120min.

Weekend ramblings: Risk Management

Had an interesting discussion with Dave around risk management and read some of FL's thoughts and methods on that topic. Makes very good sense and might be the missing piece in my trading journey. I'm confident about my method and the expectancy is quite acceptable. What needs to be accounted for is the change I've introduced few weeks ago, namely 'diversification'. Now that I'm trading metals, currencies, notes, and soon Gas & Crude, on top of stock indices, managing what size I enter will be crucial and will need a disciplined approach on how I spread the size and risk on all these markets. Can't just rely on what the setup looks & feels since my goal is capital preservation before thinking about profits.

Here's a link for future reference that has great insights on risk management and position sizing albeit most discussions are on stocks and optimal number of shares. How about futures contracts guys???

I spent some time working FL's spreadsheet and created the 3 columns he talked about in his discussion posted on monkeys.dacharts.com

May 19, 2006: Cnsld

I decided to go against my plan and trade today - mainly currencies & metals. There was no interest on my part to trade indices since I don't trade Friday afternoons and there weren't any setups I saw the night before.

Today the market consolidated and as mentioned in last blog entry I was looking for the Dow to dip and retrace to the 'Bull Zone'. This is what happened today as highlighted on the Dow chart and now it's time for the market to show whether it'll be resistance or will go penetrate and stay above it. Looking at today's breadth it clearly chopped around the zone and there were no setups on YM nor ER cuz both were out of sync w/breadth in relation to ma.

Monday mornings are the toughest so I'd wait till the afternoon part of the session and see where the market is before trading. If long then I'd like to see all the indices including BKX above their ma. There's a chance for a gap down or chop in the morning with a strong followthru to the upside in the afternoon.


This chart is what spoilt my planned long weekend :P.. I kept thinking about the Euro setup that I decided to show up just to trade it. As previously mentioned I was expecting the RS on the H&S to materialize after retracing to upside of the longer-term TL. That's what took place and I entered on break of the RS TL and ma (50&70ma)..don't they look like anaconda?? lolll.... The trade setup is highlighted in the chart below..Ditto for the JP which broke the bear flag on 120min as expected but didn't trade it.

As for Gold I was expecting a bounce up but that didn't happen and never reached top of triangle. It breached the 675 level I talked about and that was a trade entered as well. I missed the notes (ZN) trade but that wasn't my focus. The BP moves better in terms of profit range and shall look at it.

Note: I've changed the commodities layout and added NatGas and Crude which I shall be trading in the near future. Grains will have to take a backseat for now since they're not electronically traded till end of summer.


This is the euro setup I was looking at the day before and the RS setup highlighted in Red. One can see that the profit target was the neckline. Didn't catch the whole move but walked away with total of 140 pips on 2 contracts which was my best trade ever on Euro! :)

I will be off next few days since I deserve a break.

May 18, 2006: Chop & Drop

The market chopped around most of the day and broke down late. I sure missed the nice move down. There was only 1 evidence that I can see predicting this downward pressure which is shown on Addq - that creepy pattern that keeps going bleeding then drops like a rock (waterfall)...The Dow did chop all day in that bull zone but eventually gave up and the bulls didn't indicate any interest in defending it, sheesh!!

So what now? Everything is well below its ma so no longs. Nevertheless, I'm expecting the Dow to retest that zone from that underside so a bounce should be in the cards tomorrow. I'm taking tomorrow off and enjoying the long weekend. The hours weren't as bad this week.



I was challenged today with Gold trades. Based on yesterday's analysis I saw a bounce to the upside so the first trade was playing that descending channel anticipating a revisit to 706 or so...got chopped around pretty good although the idea & setup were correct....the 2nd trade was the H&S neckline break and that made up for it and some more.. Euro bounced to upside as I anticipated and I went long for a nice trade, nothing big but good enough. Best trade was notes where the long setup provided a nice trade. I sure missed the move on Silver.

For tomorrow I expect Gold to hold the support line as well as Silver holding above it's 50ma. The triangle on Gold is still playable as long as 676 level holds.



The H&S provided a long setup that I've been watching as it developed over last couple of days...yeehaawww :) (So that makes me a cowgirl???)













The Euro hit the underside of its major breakdown TL as I expected. Today's low was right on the neckline & today's up move was the formation of the RS on a larger H&S as indicated on 120min. Any break of today's TL signals the completion of H&S pattern and possible further breakdown if neckline is breached... something to watch for tomorrow.



I also see a consolidation and a bear flag on the Yen (10 & 120min). The patterns on currencies indicate downward movement.