Fri. 11_30

Today's Trade:

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

Sloppy morning with two scratched trades to start.

Going into the close was a 3d criteria setup

Thu. 11_29

Today's trade:

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

3 trades. Blue arrows = etries, Black arrows = exits First long entry, I wasn't expecting much from it. Second Long entry, Got whipped out. Was quite happy with how I was managing the trade at the time, but SO got suckered out of it, so I lost that mental battle. Ended up getting back into it for the same price of the original entry 15-minutes prior (before the official "trigger).
MAE for the (12-noon) trade was "only?" a point and a half and got out with a point and a quarter loss :/
Getting back long on the snap-back profits were taken with +2.75 points and then again at +2.5 points, for an average +2.5 points.  Exits were based on a confluence of a Fib. projection (not pictured), resistance (in the form of a prior breakdown point) and the overnight highs (pictured in the 3m chart above).
Unfortunately I didn't take the short entry that is marked with an "X".  The setup being a price pullback, indicated by the "2b" criteria on the 15-min 3/10macd.

The underlying "criteria" of the day was anticipation of the 2c-2d turning into 2a (and possibly 1a, which didn't happen. 1a would have likely been the result of price (momentum) breaking the highs of the day).

On the higher time frame I wanted to make a clarification.  Going into Wednesday I was leaning with a short bias and the trade failed, but I wanted to run through the bias process.
My premise was as follows:
- We were due for a pullback off of the most recent momentum on the Daily chart.
- On the smaller time frame I was looking for either:
      - the fast line turning red, OR
      - the fast line turning red, pulling back to the slow line and then turning back down in the fast line.
(essentially an XYZ zig-zag pattern in the fast line).  Shorting the initial negative reading of the faster time frame's fast line is always a higher risk trade in my opininion, while entering after a pullback has ocurred in the fast line is more favorable.  So...
  The distance between the initial short entry (blue down-arrow on the 65m chart) and the lows of the move was $1.42 or about 14.25 points on the e-mini.  The official stop-out trigger (Second black down-arrow) was $1.04, or about 10 points on the E-mini.
So, here's the thing; if I know this short entry to be higher risk (because eventually I'm going to be anticipating a pullback in the fast line before getting a higher probability trade) the trade should have been lightened as price comes into support.  So if I took half of the position off at support and took a loss on a stop out, damages could have been paired.  The approach I use is not meant to be a "system" as exits are more discretionary in nature.

Notice, that in the daily chart price has been increasing while the fast line on the 3/10macd is decreasing.  A typical sign of a short squeeze environment and an important lesson in using an indicator, price can still increase while the indicator is decreasing.
From here we could see:
- The daily chart fast line pull back more, where we would look for the 65m fast line to turn red and/or turn red, pull back then tick down again.
- Otherwise, we could see the daily chart fast line tick up, which would trigger on the 65 min chart with an up-tick of its fast line (which would in all likelihood be a price bar close greater than today's highs).

Wed. 11_29

Didn't have time to post these charts yesterday:
15m & 5m with 3/10macd....the Fib. projection confluence target of $142.21 area was hit in the pre-market

the day's trade for Wednesday Nov. 29

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

The higher time frame; support was quite strong.   Suspecting some selling on a test of the 50-day MA

Tues. 11_27

Today's trade:

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

Only took 3 trades.

First up arrow has an "X" indicating that I considered the trigger but didn't enter.

Was disappointed in a late entry on the first trade I took (long).

Second long entry I got out with a very small profit based on the order flow at the time.

Third trade, short, was before the "triggered" entry.

The higher time frame showing a potential short entry on the close today.  I wouldn't want to consider long positions until the 65m chart recovers a fast line > slow line orientation.

A look at the IWM daily chart showing a rejection candle at previous support and at the top of it's long-intact upper channel.

Mon 11_26

Today's trade:

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

The 15-minute set up in the following ways:

 - 2c - 4d - 3a - 3b - 3a - 1a

So, for half of the day the 3/10macd was oriented in a bearish reading as price tested lower (and within the two moving averages).  In the early afternoon the 3/10macd had a neutral-bullish orientation as price reverted back to a mean (20-period MA) and based at resistance.  In the later afternoon the macd pulled back into a positive sloping slow line and traded higher in the form of an ABC wave (also inverted H&S),.

A closer look at the 5-min

First trade short; kinda late, quick profits taken.

Second trade long; Only really anticipating a return to vwap

Third trade, long;  late etry and basically a b/e trade (minus comm.)

Fourth trade, long; very choppy around IB_high.  Second exit was a sucker move (me being the sucker for getting out flat on the second half).

Fifth trade, long, after realizing the Descending broadening pattern I took a smaller position with a target of roughly the measured move, which coincided with Fib. projections and near the previous day's close.  Another reason I need to switch over to the E-mini instead of the SPY.

Higher time frame not much has changed.  Price is back within the previous breakdown point (previous support), with an untested gap overhead.  Further price advance should be met with increasingly more assertive shorts.  Looking for a read on momentum with the faster time frame (65-min on right).  A push higher (pushing into $142) and forming 2b criteria on the 3/10macd would be a decent shorting set up to watch for (similar to a 3-push pattern).

gold update

Gold had a strong breakout day today.
Looking to test $1800 yet again.

Looking at the higher time frame monthly with a weekly trigger chart, should the weekly 3/10macd fast line turns green we could consider that a buy signal for the higher time frame (ultimately we would then like to see the fast line cross the slow line on the weekly, rather than weakly roll over).

Fri. 11_23

Shortened trading hours.
Strong advancing day.
Price closed right around the 50% Fibonacci retracement, as measured from the September highs to recent November lows.  In five sessions we have retraced 50% of what was the result of 44-days of selling.  This also happens to coincide with a previous breakout point, as per yesterday's post.  I'm looking foward to seeing how the pullback plays out, as it looks like we could get a 3d setup on the daily chart.

When the traded time frame is showing the 1a criteria and the trigger chart has a similar criteria, I'm not waiting for a tick up in the fast line on the trigger chart.  Rather, I'm looking for a simple breakout trade.
So, in the chart below the 5-min trigger chart has a fast line that is decreasing while price is increasing.  By the time the fast line ticks up price is already extended.  The secondary entry comes when the 5-min  3/10macd resets in a bullish orientation (fast line greater than slow line).

displacement

We can think of a particular market like a body of water, and the buying and selling of that market as adding or subtracting "weight" from that body of water.  So, much like Archimedes principle of displacement, price always goes back to areas of previous breakouts (I use "breakout" to be synonymous with a "breakdown").  If there are more buyers than sellers and price breaks out through a previous resistance area the eventual selling of those buyers will bring price back to the area where accumulation was taking place to fuel the breakout.
With that said, here is the IWM weekly (left) and daily (right) charts:

Worth noting, the weekly time frame came in to a long-standing Support/Resistance pivot and has (so far) held.  That pivot coinciding with an untested gap fill.
As more shorts entered the market around $80.50 and higher, the covering of those short positions (at a weekly support pivot) is causing the displacement of price to return back to a level where "weight" was added (the $80.50 area).  After which time we'll see sideways accumulation or distribution.  We'll know whether it was accumulation or distribution when price breaks out higher or lower from this sideways consolidation.

Wed. 11_21

Should have known better than to trade too much today.  Instead I got chopped up a bit.  On average about 2.25-points (ES equivalent) loss.  Not that big deal, just disappointing to have fallen for the chop environment.
Blue arrows are entries, Black arrows are exits.
7 total trades; that right there should have stopped me as I should only really expect 3-4 trades a day out of the SPY.
The first trade was just dumb.  The second could have been managed better, likewise the third.
The fourth was a scratch.  The fifth was decent.  The sixth wasn't SO bad, I think my average loss was around a quarter of a point.  The seventh trade was also for about a quarter point loss which was frustrating after being up over 1.5 points and then breakeven at the blink of an eye.
Essentially, the first two trades of the day were my biggest losers, while three other trades were small losses which added up.  Equally frustrating is knowing in hindsight that had I held on to a lot of the trades for break-even, most would have had a MAE of only 1.5 points.

Volume today was a cue to fade and scalp quickly

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

$139.50 held resistance today

Starting to see that stark reverse divergence on the daily time frame, with waning momentum on the faster time frame.  It would seem that further advances may come under heavier selling pressure.  Further selling would beget dip-buyers looking for a higher low or buy divergence, but that would be about 1-2 weeks out.

Tue 11_20

Slight continuation of the previous day's momentum to start the day.  A bit of a panic move on a Bernanke statement, otherwise closing right around resistance.
5 trades; 4 long, 1 short.

The day's trade;

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

$139.50 looking like the next immediate level of resistance, while the 20-day moving average is around $139.87

Mon 11_19

Extreme advancing day.  Breadth being extremely bullish.

The 15m & 5m with 3/10macd below.  If you didn't buy the open I prefer to wait until the 3/10macd fast line on the 5-minute crosses (or anticipate a crossing of) the slow line.   First long entry a small loss.  Second long entry, a small gain.  The 3rd up arrow long entry indicates the "trigger" but I actually entered closer to vwap and added to the position at around the last up-arrow.

During these extreme advancing days I find it's often best to look for an entry (or build a position) on new low TICK readings, with the anticipation of closing near the higs of the day.

On the higher time frame:
Price strongly recovered the 200-day Moving average, however it has a downward sloping 20-MA directly overhead and a downward sloping 50-MA.  Corresponding with the 20-day MA is the 38.2% Fib. retrace.  Still very much in a down trend which will start to come under pressure from short sellers once momentum begins to wane.

Gold

An update on Gold which is still basing under $1800.
The weekly (on the left) is currently in the 2c-2d criteria.  The 2c-2d setup puts us on alert to look for a 3d setup on the faster time frame, which is what we saw on the Daily chart (on the right) over the past week.

Interesting how both the weekly and daily charts show price holding a 50% retrace of their previous momentum moves.  We wouldn't want to see the daily give up much more traction going forward, otherwise we could see it go back into a corrective cycle.  But a break above the $1730's could generate a move back to test weekly resistance in the $1785 territory.

Fri. 11_16

A doozy of an Options Expiration day.
In the chart below:
The first long trade, based on the 3d criteria was fine (took a loss), it should have broken out and I held onto it longer than I should have.
The first short I actually entered in the bar prior to the triggered bar.  For some reason I left out my exit arrows, which were basically around the previous day's low (green dotted horizontal).
Long entry around 9:30 for a small loss.
I didn't take the two short trades that have an "x" between them (on the 5m 3/10macd) around the 10am hour.  In hindsight, I was fine not taking the first one, but should have taken the second.  There's a nuance with the 3/10macd fast line that I have a hard time explaining, but this instance reflects that nuance.
The next long I bought the close of that strong bar and added on a retrace just above vwap.
I tried another long around 11:30 for a small loss.  I didn't think it would break higher, but felt I had to have something on in case it did.
The last long of the day I entered prior to the trigger bar (undisciplined?) right around vwap (135.67 I believe).  Perhaps foolishly, I did wait for the last 2-minutes of the day to close out the remainder of the trade, so I was able to get out at .49 (previous day's high).
I do like how the resistance pivot broke out AND held a re-test, looks promising.

The day's trade:

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

In the Daily chart below we came within a few ticks of the 100% projection of the prior seed wave

Interesting how the weekly is holding the 50SMA, also the pattern of higher highs and higher lows (on the weekly chart) continues to hold true.  If I were to be looking for the 2c-2d criteria trade on the weekly, I would still be waiting for the daily to set up a strong 3a push or the 3d criteria, which would take at least a week, probably closer to two weeks.

Thu 11_15

More down side on slightly weaker momentum.
Price bounced (nearly to the penny) of a 61.8% retrace from the June lows to September highs.

Arrows marked with an "x" are what I would have considered an entry, but I didn't take the trade as I was away from the computer.  Into the close the 15m chart set up the 3d criteria on a double bottom, so the resistance to overcome going into tomorrow is into the $136.25 area.

The day's trade:

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

As an aside, interesting to see the Up/Down volume (chart on the right) remain muted today as we made lower lows.