ES Hourly
STILL playing the main theme of a breakout on the Descending Broadening Wedge (the blue trendlines). ES pulled back to support at 815 in the early part of yesterday's session and is currently looking like it could get up to 850 and 876 (Target 1 and 2 on chart above) - that is, if it's able to stay above the 835-840 zone.Secondary theme: Ascending Broadening Wedge (the white trendlines)
I'm still of the view that ES could be aiming for ceiling of the ABW at least. A breakout above would be a very bullish development.
Plan A (Long)
- Long at: 840, 850, or at no specific points within the region spanning 840 and 850
- Exit targets: 850, 875
- Short at: 850, 840, 835
- Exit targets: 840, 835, 830, wherever and whenever ES touches base of ABW, and 815
10 comments:
Hey Jules,
I have a question for you :) What's your method for trading during rallies/breakouts? When we trade during rallies, we tend to chase price and of course, get trapped at the top (aka today). Sometimes momentum is just so strong that we miss the opp. to enter a pullback as well. Just wanted to get your perspective on this.
Thanks!
Hello Jane :-)
I don't trade breakouts. I trade within a specific zone - usually 5-point zones.
Let's say if I'm looking to buy within 840 - 845 (knowing that 845 is the resistance), I'll enter at around 842 or 843, and get out whenever momentum is no longer in my favor.
My exists are almost always based on what the tape is doing. In the example I've mentioned, I might not even get out at 845, coz many times, price will go beyond 845 and turn back down (which is why I don't buy breakouts).
I seldom buy a dip either, coz I don't know where the throw back will end, and I don't like to use a hard stop when I'm scalping. If I were to buy only upon confirmation of the end of the throwback ie. on the formation of the first bullish candle after the throwback, that's almost like what I mentioned above anyway - ie. buying at 842 when the support is at 840 :-)
Oh, Jane, an exception is pullback to trendlines and resistance on a downtrend.
So,I will enter on pull backs, but I don't enter on throwbacks. Don't know why, just what I've observed. Maybe I'm just simply more fussy when buying. Selling is much easier for me :-)
Thanks for the reply Jules!
We have a hard time selling and usually long... We typically play EMA retracements/bounces, trendline breakouts/reversals with confirming RSI (divergences) and SS indications. Finding it even harder now to play during rallies like today :/
Did you remember to take a break today? lol
I remembered to take my lunch, Jane. That's a huge progress LOL! D threatened to hang donuts around my neck if I continue to forget lunch :-)
Re indicators - I have experimented with too many and ended up getting frustrated coz I get distracted by them. I suspect it's all about me and my controlling issue. I override them all the time, and then feel bad about not having stuck to signals and such.
RSI and SS work in sideway/ ranging markets, coz that's what they are meant to track anyway. They don't work on strong trending day - ie. they'll just remain in oversold or overbought. But I used to love to buy and sell when they're in that region.
You said you find selling hard - are you referring to futures or stocks?
Good thing you remembered to eat. Now did you remember to feed your cats? :)
I find indicators great in terms of finding price divergences to signal a change in momo. This is when I catch the most knives (many bandaids on my hands). And yes, they don't work well in trending markets unfortunately.
What I really hate about strong momo updays is that I never trust the move, yet end up chasing it after feeling left out. Trying to figure out some strategies for such an environment.
Like the newb that I am, I don't feel comfortable shorting ES at these levels.
Haha...I'm sure you're not alone, Jane. Is anyone actually comfortable buying or selling these days I wonder...
Yes, I fed my cats. They know how to get attention :-)
Excuse me for butting in.
One way of getting in a huge fast move like yesterday's is to bracket the market. Wait for a lull in the up move then to put a buy order at the 8ema (I think on the 2 min chart and keep moving it up as the ema moves up) and a buy stop above the highest point of the swing, so you get filled whether it pulls back or not. but make sure to cancel the other order so you don't get filled twice. Targets are stops are your discretion.
I'm not recommending this method (nor do I trade it), just something for discussion. I think it would have worked well yesterday.
-NTRT
Jane,
re your question on how I would trade a day like yesterday (just realized that's what you were asking, apologies...) - I don't trade days like that. That was a parabolic up, it wasn't even those nice 2 or 3 legs moves with 30 - 60% retracement. I have never chased something like that. It's mostly covering (plus bulls jumping in the later stages), and you just don't know where it's heading. For moves like that, market can quickly do a full reversal before you know it. In the first place, it's difficult to get in coz there isn't a dip for you to get in.
Wow, sounds exciting, NTRT :-)
I'll need very fast fingers for that won't I? :-) I'll study the setup, though I've always preferred to just sit and watch a parabolic market :-)
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