ES Trade 2/9 - Happy

ES 10min, 5min & 1min

Bailed at 864.5, which is 3.5 points away from my initial target.

Reasons:

1) ES hit a high of 866.5 and came tumbling down to 862 slightly after US market open and I take that as a very bad sign, since it's not characteristic of a bullish market to fail to trade up to the previous session's close 10 minutes into the active trading session

2) My plan was to get out before the scheduled announcement of the bank rescue plan at 10am EST, even if I don't hit my profit target, and ES's retracing instead of advancing to close gap simply gave me more reason to bolt

D thought I would run when ES dived back down to 862. I hadn't run coz I needed to see buying really drying up as it climbed its way back to 866.5. Simply put, I needed a solid reason to exit my trade.

ES struggled up indeed and I could see that those who thought they were buying on a dip were the minority. The others were simply not jumping in. When price started coming down again, I had to take my profit. Couldn't leave it on the table when we were still trading below Fri's close 15mins into the session.

This time, I'm not upset at all that I didn't hold til I get what i want. I gave the market and ME a chance to test out my hypothesis. The scenario didn't work out as planned, and that's just too bad.

I did my best at sitting - I was objective, as well as realistic about how confident I should be. Knowing that my confidence is based on how well I'm analyzing what's happening INSIDE ME when market's no longer acting the way I anticipated it to, I have to get out before my heart messes with my head.

Market could very well get back up later in the day, but that's not my concern. If I really did sit and market indeed went my way to hit 868 and beyond, I would have considered that a fluke - something that's not going to happen on a CONSISTENT basis. And if I'm not going to work towards being consistent, I might as well not trade.

In a nutshell, I am happy with me today!

Profit: USD 262

ES Trade 2/9 - Totally Going To Trade My Plan

ES 10min, 5min & Hourly

ES making round bottoms on 5 and 10min, and formed a gapped down doji. Support at 858 for now.

Entered at 859.25, and am holding this. It's a brand new week and I haven't got anything to lose. Ha.

ES 2/9

ES 5min

Sticking to my main plan.

Entry Points (Long): 872, 862, 857
Exit Points: 885, 880, 875, 868

Steve Nison, Dr Brett & MY FACE

I'm going to be lazy about this (yes ,yes, I'm selling Nison and Dr Brett, whatever...if you don't wanna kill your eyes, just go right to comment section here)....

Rushing out to get my face done - need it to look perfect for almost a whole week of castings and print shots....

Screenshot of Mark's note on my comment section:


Screenshot of my reply:

ES 2/9 - About Bottoms, Busted Bearish Patterns & Such

ES Hourly

My thoughts on what I'm seeing:

Ascending Broadening (AB) Formation (pink trendlines) that's supposed to encase prices was busted on Thursday when ES punched through its base but quickly made a V-shape reversal back into the formation.

The busting of the pattern was hardly surprising, given that an AB formation that develops at significant lows usually breaks upwards.

Now that the pattern is busted, I'll be expecting to see an even better upward breakout performance. The psychology behind this has everything to do with bears being caught by surprise - their covering sent price soaring, and that triggered new buying and fueled the much awaited rally.

When you combine the Descending Broadening Wedge (blue trendlines) and AB formation , you should easily see a Wash-and-Rinse (aka Double Bottom - albeit a lopsided one) pattern. Using the measure rule for double bottom - I have come up with something like 893.5 as the ultimate exit target for this pattern.

I'm using the Double Bottom pattern to project my exit points because I can't use the AB formation to do any computation until ES actually breaks out of it. In any case, it doesn't really matter which figure I take, ES is ultimately going to be stopped by resistance at 900 (which is very close to the targeted exit for the double bottom pattern).

900 is target 3 on my chart. Targets 1 and 2 are all resistances above where ES closed on Friday.

It's apparent that I'm taking a bullish stance. How could I not when I'm seeing double bottoms, Inverted Head and Shoulders, and a recently busted bearish pattern on a chart that's actually making higher lows ( which are not spectacularly higher - and I take that as a good sign, since a healthy rally is usually anything but spectacular)?

I'm not going into the realm of market fundamentals - anyone who's been paying attention to macroeconomics and keeping close tabs on what the Obama administration has been doing about the mess they've inherited from their predecessor should know that we're not in a very good situation. When things get this bad, and you give investors a little something to look forward to, they are going to get EXCITED for a few days, until you start giving them reasons to believe that you just might not be able to deliver your promise within the stipulated timeframe.

I'm envisioning that the HOPE bit would drive ES to the 900 - 1000 level.

The REALIZATION part we should see when ES tumbles back down after hitting that major resistance (900-1000).

Rationalizing the market is such a breeze.

No wonder everyone's doing it.

For next week, I'm hypothesizing that either of these scenarios will unfold:

1) ES moves up to hit my target 1 at 876 (blue horizontal dotted line), then throws back to 856 (red horizontal line), which is a previous support turned resistance.

856 happens to be a fib retracement of 50% if we take 876 as the high ,and 836.5 (yellow dotted line) as the low.

If ES were to turn back up from there (ie. 856 - the red horizontal line), and hit the ceiling of the AB formation, that would qualify as a partial decline. Bullish pattern.

2) This is the scenario that I'm NOT convinced will develop: instead of pulling back to red horizontal line, ES lands on support at 850, or at base of AB formation, then bounce back up, only to reverse back down after being stopped by red horizontal line, or ceiling of AB formation, or 876 (my target 1).

If this really were to happen, I'll be looking out for a head and shoulder to form , especially if the base of the AB formation actually gives the HS a nice neckline. Bearish.

My target 1 for this breakout below the AB formation would be 816.

As much as I love playing with scenarios, I can't use them to make minute to minute - or second to second - decisions for scalps and daytrades. Not for the time being (I need a stronger heart and bigger account...). But they have been very useful in helping me to spot trends and patterns that are developing on lower timeframes, on which I usually formulate my plans for entries and exits.

NYSE data for the week of Feb 2:

Feb 2 & 3

Feb 4 & 5

Feb 6


Market doesn't look horribly weak to me.

ES Trades 2/6

I'm choosing to be a coward. Not getting in on the rally, coz I really want to maintain my positive week, and months.

I can't care less about the concept of "No risk, no gain" (or "no fun", as someone in the poker room once told me). I'm making my gains MY way.

Not having the nerve to trade my very bullish DBW plan when the market's staging such a spectacularly crazy rally is a little frustrating. I can't explain why I've chickened out. Maybe there's a part of me that's still intimidated by ES. Or maybe coz I just don't want to part with my hard earned money (I mean, I've not exactly been cruising through the past 2 months)

It's clear that ES has no resistance up to the 875 level. It might pause a little at 865 - 866, but it will not be stopped.

Just the way I'm reading all my charts. And the tape.

ES Hourly

ES 5min

For today: USD 150

Reasons, Reasons & More Reasons

Is it just me, or do we all see the inherent lunacy in these attempts to rationalize the market?

I've been watching charts and tape for more than 12 hours straight now, and one thing that's clear to me is that neither the bulls nor the bears know what they are doing.

The other thing I know is that the market's not going down today no matter what.

ES Trades 2/6 - Busted Diamond Top? Double Top In The Making?

ES 5min

Busted Diamond Top.

Or is it really?

In any case, I'll be watching 848.

Plan A (For Busted Diamond Top) - LONG

If ES breaks above that, it's almost (to ask for certainty in the market is absurd) a confirmed busted pattern, and I'll be aiming for exits at 855, 865, 870, 874.

Plan B (For Double-Top Pattern) - SHORT

Should ES be stopped by 848, I'll be looking to trade a double top. Exit targets will be at 836, 830, 825, 820.

Plan C (For Diamond Top Pattern) - SHORT

If Diamond Top pattern is NOT busted (meaning that if after the current pullback to anywhere beneath 848, price were to turn back down towards 840), I'll look to sell at around 840.

A less aggressive play would be entry below 836 - the point which confirms the diamond top pattern - or after price drops below the upward sloping channel (the 2 white trendlines) and fails to pull back to the channel again.

My exit target will be support at 829.5 (measure rule of Diamond Top in this case is: 840 [point of breakout of diamond top] - 12 [the height of the valley to peak of the diamond shape] = 828)

Pre-market Entries
Bought the pullback after ES broke out of diamond top (ES is currently trading along the upward sloping channel):

ES 2/6

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
  

Plan B (In the event that ES is stopped by 850)

• Short at: 850, 840, 835
• Exit targets: 840, 835, 830, wherever and whenever ES touches base of ABW, and 815

HUH???!!

This is the reason why I don't read real-time news update as I trade (I salute the person that put up such a report - the disinterestedness is astonishing):
Market gone bonkers:

ES 5min

ES Hourly

No, I'm NOT crying. But I'll definitely trade a busted pattern in future.

On 5 min, it was a busted breakout (on the downside) of a descending wedge (yet more reason for me to only trade a descending wedge on the upside). On my earlier post, I did say this: there're a lot of offers but market's not plunging.

From now on, I am going to make it a point to keep referring to my premarket posts throughout the trading session. For today, it had totally slipped my mind that bears would have to do a mass puking when price simply refused to plunge on bad news.

D consoled me that what matters is that I was right. I told him it was a wrong day to be right. There were good reasons that I scratched my trades so many times. I take that as a sign that I'm not in tune with the market, and I don't regret having stayed on the sideline.

I will soon find the courage to resume trading busted patterns again.

ES Trades 2/5

ES Hourly & 5min

Today's all about scratching trades.

It's almost an hour into the trading session now and gap's still wide open. On the hourly, ES seems to have completed its 2nd leg of a measured move down, and trading above 815.

I ought to be buying. Maybe I do get a kick out of catching a falling knife.

Am staying out.

I'm not going to trade against trend (yet to figure out what it is, since bears are not particularly aggressive, and bulls are merely supporting - or maybe it's just the bears selling and covering - anyway, market's just a mess), but neither am I going to trade against my plan.

I know better than to simply ride with whatever that comes along. I much prefer to surf only familiar waves.

Today's waves are just crappy - for me.

Profit: USD 100

ES Trades 2/5 - Just Warming Up....I'm A Contrarian Again

This is what happens when you have a fairly bullish view of the market, and it keeps trading below pivot and below the previous day's close:
I held the first scalp (which again, turned into a day trade, and again taught me so much more about the behavior of the instrument, the market, and my own psychology, weakness and strength - somehow, without money on the line, I just don't absorb and process information as fast....it's a curse!), and scratched the 2nd (ok, this time I learned).

I'm still bullish. There're a lot offers, and market's not plunging. Must mean something...

Anyway, I'm seeing a Eve, Eve & Adam Triple Bottom (see chart below). That must mean something too.

I'm not selling until price's stopped by 831 at least. I'm going to have to pin this up where I can see throughout today's session: not selling, not selling, not selling!!!

ES 5min

ES 2/5

SPX Daily

What I'm seeing is that we are trading in a symmetrical triangle of sort, and SPX can either break above or below it. I'm inclined to think that the 2 dojis (in red elliptical) should provide fairly good support, given the reinforcement from the demand zone beneath it (800 - 815). Even if price were to cut through it like a knife through butter, there's still support at the low of 741 on Nov 21. Just the way I'm reading my chart. Whether we get a bounce from there still depends on the way trends unfold daily.

ES Hourly

Still playing the main theme of a breakout on the Descending Broadening Wedge (the blue trendlines). I tend to see yesterday's downward move as being merely a pull back...

Secondary theme: Ascending Broadening Wedge (the white trendlines)
My thinking is that ES will trade up towards the ceiling of the ABW, or to 835 (which is also fib retracement level of 50%) and 840. If ES were to turn down towards the bottom of the ABW from 835 - 840, I'll tread carefully, coz that would be a sign that what's unfolding could very well be a partial rise. Bearish.

ES is trading in the range of 827 to 828 now, overhead resistance is yesterday's close at 829.5. Support's at 825 (I HOPE - coz I'm in a long position again! $&*#&$*)

Plan A (Long)

• Long at: 825, 830, 835
  
• Exit targets: 830, 835, 840
  

Plan B (Short)

• Short at: 850, 840, 835
• Exit targetss: 840, wherever and whenever ES touches base of ABW, and 815

ES Trades 2/4

Today's play's all about ES' break out from a Descending Broadening Wedge:

ES Hourly

Entered twice for scalps (although one of them turned out to be a 5 hour scalp - talk about sitting!) at 834. All other entries were based on my view/plan that ES would hit 840, then 850.

1min chart below shows the the zone that contains all my entries (all LONG - I mean, I was bullish, and I've got to be, considering that I was trading a breakout above the wedge...I've had enough bad experiences trading against my view before my view was proven to be fatally wrong), and trade view below the chart shows all my trades.

On top of the hourly and 1min, I've used also the 5min chart (for all trades before 930am EST, I was looking only at the hourly and 5min)

ES 1min

Profit: USD 312

It's the first time I've traded ES during US market open after a rather unpleasant experience trading it in Sept last year; yesterday was the very first time I revisited it. What surprised me was that it didn't feel half as repulsive as it did last year.

Maybe it's coz TF has become such a wacko that by comparison, ES just seems so much more palatable...or maybe coz Sage really knows better when he said ES is tame and that I should give it a chance.

Sage, I've ditched TF for ES. We can exchange notes now!!! LOL!!!!!

Done for the day. Not overtrading something I barely know ...

ES 2/4

ES Hourly

Pattern I'm looking to trade: Descending Broadening Wedge (DBW)

ES broke out of DBW yesterday, and is now doing a pull back - hopefully not to the floor of the channel YET, coz I'm in trade now (LONG!)!

Was looking to buy after a pull back, but MY FINGERS (Read: NOT ME!) couldn't wait and got me into a trade at 834. *$*#&*@!

This was what was supposed to happen:

Plan A (Long)

• Long at: 830, 815, and whenever ES touches the floor of the blue channel
  
• Stop Loss: Yet to figure out ES...play by ear for now
  
• Exit targets: 840, 850, 865
  

Plan B (Short)

Will look to short only in the event that ES plunges back into the DBW.

TF & ES Trades 2/3 - Another Day That I Should Have Just Stood On The Sideline

It dawned on me today that skipping lunch is very, very bad. I hadn't realized that before because D has always come home early enough for dinner (8 - 9 pm). He came out of a meeting late today, and by the time he got home, my blood glucose level had gotten so low I was seeing double, and my heart was not beating right.

To cut a long story short, my heart was racing even before US market opened, and I was putting up with a gastric pain. When my trade went against me, I couldn't think straight. Because my heart was pounding, I couldn't help but question the validity of my entry the whole time I was in trade. I kept having to tell myself to focus on my charts and to stop thinking that my physical condition was a reaction to a trade gone wrong - coz it hasn't.

After having sat on what was a very typical loss of 3 to 5 points - and missed getting out at minimum damage thrice - I felt so stretched I wanted to give up trading forever. I pressed on until I got out slightly better than breaking even (I had shorted TF, and where I got out was barely a point above the low of the day).

I am a sore loser, and I don't want to lose, coz I don't want to have to get sore.

I know, I'm terrible. Some days, I just can't help but be me.

Am calling it a day. I can't think with a palpitating heart, a gastric pain, a bad throat, and a spinning head.

D has set an alarm on my mobile to remind me to take my lunch. Got me bending over laughing, but I gather that's the only solution for now.

Strange that I actually remembered to do his laundry, feed my cats, clean up their litter box, but forgot that I needed to eat.

It's not an easy day to trade today, and I chose to trade anyway. I have itchy fingers and I don't know what to do with them.

TF is definitely looking for support. Momentum is clearly down, but price simply won't stop moving up. On 5min, TF looks like it really wants to get back up into the broadening wedge.

Today's ES and TF trades: USD 290

TF 5min

ES Trades 2/3

• 3 trades (long) along the channel found within the broadening wedge

• 1 trade (short) after ES punched through floor of channel and was stopped by 827.5 on pull back.

ES 5min

Exit target for last trade was initially set at 422 - the floor of the broadening wedge -but I was wary of 825 support. Got out at 426 instead.

ES is now trading below 422 (out of the wedge), and looks very much like it's going back up. Since ES hasn't broken out of the wedge on a partial rise pattern (to qualify as a partial rise, price would have to touch the lower trendline - in this case, ES' previous low was way above the floor of the wedge, as 818 had provided support), I'm inclined to see this as a bullish sign - at least temporarily.

For the trades above, I have used both chart and tape (although I would really like to stop monitoring the tape and just trade according to plan).

Tape reading ES is way more fun than tape reading TF!

Update:
Traded a bump-and-run pattern, but bailed when I realized ES is trading within channel again (see chart below). ES could very well go back up to 831 again on a Wash-and-Rinse / Triple Bottom / Round Bottom pattern (whatever, I'm just watching out for anything that looks like a bowl...)

5 ES Trades

TF 2/3

Pattern I'm looking to trade: Descending Broadening Wedge (DBW) on Hourly & 5min

TF 5min

TF is seen here as having broken out of DBW, and has left demand zone of 425-440 for now.

I'm looking to go long at several points - the first being TF's pull back to 446 (especially if this coincides with a partial decline in the hourly).

Measure rule for DBW for breakout upwards is the highest high - in this case it's around 475.

TF Hourly

Plan A

• Long at: 446, 451, 458
  
• Stop Loss: 443, 449, 454
  
• Exit target 1: 458
  
• Exit target 2: 468

Plan B (In the event that TF pulls back to below DBW)

• Short at: Ceiling of DBW, whenever it seems to be stopping TF from breaking back out of the wedge - if TF is trading below 443 then, that would be most ideal
  
• Stop Loss: Depends - either a fix stop at 443, or 1 to 2 points above DBW
  
• Exit target 1: 434
• Exit Target 2: 427

TF Trades 2/2 - A Day I WANT To Remember

I'm never going to check out news again during trading.

Here's a perfect bump-and run trade that I did not take (bad news - that I actually paid attention to - totally to be blamed), although I did anticipate TF to pull back to 445:

TF 1min

It was a very safe entry given that TF has bounced up from support at 436 after a throw back to that level, and TICK was in negative region turning up. My stop would just need to be slightly below downtrend line - 435 would have been far enough.

For bump-and-run, the measure rule is that you take the highest point from where the previous downtrend began, and use that as your exit target. In this case - 435.5

That's a good 8 to 9 point profit.

Definitely THE day to remember.

I took a scalp down from below 435 instead. 7 ticks and I didn't feel good about staying any longer. I hadn't put in a stop. If pattern turns out to be an inverted scallop instead, I'll be screwed.

All in all, it's a happy day!

Done trading. Will leave overtrading for another day. Market's looking for support, and I don't want to be chopped.
Throat's annoying me. Seabloke's warning me earlier today that my cough is probably going to last 100 days in all now that it's gone into its 30th is not helping at all! Why didn't I catch my doctor before Chinese New Year??

Cough aside, I'm in a terribly good mood. So, someone's getting a nice massage!

Profit: USD 400

TF Trades 2/2 - I Sat

Profit: USD 330

TF 5min

TF Hourly

Sold TF at 439.7

I did say that if TF were to go below 440 before US market opens today, I will short it.

And so I did. Set a stop at 432.6, and profit target at 433.

Then I watched. Twice I let 2.2 points vaporize before my eyes. I sat. 439.5 was stopping TF and a downtrend line was threatening to stop it. Too bad the trendline was at around 433 and at one point I suspected that TF could go all the way up to Fri's close at 443.2.

Then D called. He couldn't believe I didn't take profit and started selling me the idea of an early exit. He has been spoiling me - I hate losses, no matter how small, and he's concerned that I'll take it really badly should my profit turn into a loss...

Anyway, I didn't let him finish, and told him that I had to do this. I have to sit when there's no reason to get out yet. And if I'm wrong, that's fine coz it's just going to take me 3 points to know that. I'll take the small loss. I just have to start trading my view again. The way that I've refused to take losses has worked in the past, but it's hurting my trades in the current market.

Back to TF - As it entered the demand area, it was apparent that it would be a difficult way down for the bears. But it was also where opportunities for good momentum can be found. D then asked if I could take some profit first then go back in again. I said no, coz I've reserved a good seat, and if I get up, I'll miss the show when it starts.

And so I continued to watch as TF hit 437 support a 3rd time on 5min.

I checked the Europe and Asia market and both were NOT looking good. US is going to be releasing personal income and spending, and ISM data in a few hours, and consensus is showing a fair bit of pessimism.

So far so good.

The market's not going to plunge because of more bad news of course.

In fact, I was thinking that if things get really gloomy today, there's likely going to be folks who will start bottom fishing - with DOW trading just beneath 8000, a pullback is not too difficult to imagine.

As I was going back and forth with the 2 scenarios in my head, I noticed that TF was forming one of those long bearish candles on the 5min. I didn't like that. It was reaching the floor of channel too quickly. I needed it to come down gradually so that by the time it hit the floor, it would be somewhere around its previous low at 432. I checked the hourly, and saw the 435 support. Dangerous number.

And indeed, as soon as TF touched 435.5, it bounced back up quickly. That was a sign to get out. I covered with a stop at 436. No transactions took place there. TF went offer at 436.4 and I was out.

TF is currently trading just above the floor of the channel on the 5min, and what I'm looking at is clearly a descending wedge. Given the 435 support, I'll be cautious about trading a breakout below the wedge. If it doesn't fail, I'll take a short entry after a pull back to either the base of the wedge or at 437.

I might take scalps if I have reason to believe that TF is going back up to 445. But I would really need my Tick indicator to do that. If it gets choppy, I'm staying out. If I don't, I'll be the biggest ass I ever know.

TF 2/2

TF Hourly

Pattern I'm looking to trade: Head & Shoulder / Inverted Cup With Handle (whatever...the cup's not even formed yet, let alone the handle - once TF drops below 425, that's a good pattern to trade)

As TF approaches the area (425 - 440) where people have been willing to buy (look at the number of bullish reversals that happened there), I'm actually rather wary of selling.

But since market has generally been weak (see screenshots of NYSE data below), I'm going to take my chance.

If pattern performs, TF could go all the way to 430.

But I'm sticking to a point that 's slightly below Fib extention level 161.8, and aiming for 433 instead.

I expect TF to pull back to 450, or even to 455 first though.

Should TF punch through 440 and hit 432 without any decent retracement, I'll be looking to buy.

I really don't think I'd want to do anything at 440. If I really have to sell there, my stop would be 7 points away. So, unless the market's screaming for me to get in, I'm just going to sit back and watch, and probably take scalps on 1min.

That said, should TF fall below 440 before US market opens, I'll be happy to sell anywhere below that and place a stop at 440.

Plan A

• Short at: 453, 450, 445
• Stop Loss: 455, 452, 447
  
• Exit target 1: 440
  
• Exit target 2: 433

Plan B

• Long at: 433
• Stop Loss: 430
  
• Exit target 1: 440
• Exit Target 2: 450

Plan C (on failed HS)
No plan C, if TF doesn't punch through 440, it might just chop sideways for a while. When market gets choppy, experience tells me that I should just SIT & WATCH, or go play with my cat.

NYSE Data

Jan 26 & 27

Jan 28 & 29

Jan 30