Pre-Market Analysis - GS 7/10

GS Daily Chart



GS closed yesterday at the support of my blue channel.

I see a Bullish Hidden Divergence, which tells me that assuming that there are no news that will have bearing on the sector, GS is likely to continue to trade within the channel and very likely to trade within yesterday's range.

With the tug of war going on between buyers and sellers, it looks like GS is going to trade in a range again for most part of today's session.

Had a nice long chat last night with someone I have a lot of respect for, and he shared so much about trading that I went away realizing how little I know about the business. I took a break and didn't trade last night.

In fact, I'm taking a break from scalping and will be doing something different. Holding my position for more than one candle has always been a challenge to me. But I really want to overcome this psychological barrier.

I am grateful to M, who's taught me many things about trading last night, And I'm most grateful that he made me laugh on a day like yesterday.

Pre-Market Analysis - GS 7/9

I'm making some notes on yesterday's trading session.

GS 7/8 (5-min Chart)



Apparently there was more than short-covering that went on yesterday. The bulls and bears REALLY fought.

Dow fluctuated wildly - it was a choppy market from session open to around 2:30am EST.

As far as GS was concerned, sellers continued to have an upper hand at the open,and found support at the base of the "box range" in my weekly chart (refer to my weekly analysis from Jul 8) - at around 167. A bullish morning star then sent GS up.

GS' climb didn't see it reversing the trend set by the evening star (formed 5 mins after session's open). It did however, succeed in moving price up to Fib level 50%, before it was stopped by a bearish harami/ inside bar, a doji and a hanging man.

From there, GS dipped below the support from previous day's hammer, rallied (2nd rally) back up again to resistance set by previous day's 2 spinning tops.

The 2 shooting stars that formed at this top served to reinforce the resistance (which should become a strong SUPPORT in the session/s that follow, as and when GS pulls back) set by the 2 spinning tops . The validity of this resistance was proven when the 1st rally stopped below it, and again when the 3rd rally stopped at around the level of the first.

Basically, GS traded sideways / in a range until a break out of that box range happened after a series of positive news in the market, including oil's pulling back to hover near 135.9, stabilizing home sales, favorable news from various companies, etc. Finance sector really performed and GS went up steeply for 20 mins after 2:20am EST, and then steadily til session closed.

My trades yesterday were 2 puts bought on GS' decline at the open. As market was erratic, and my indicators were showing mixed signals, I merely sat to watch the very interesting attacks and counter attacks (yes, I'm intrigued by candlestick patterns) that went on when GS was ranging.

Truth is, I had really wanted GS to fall through support, so I can buy a put (because despite what I said about it going up for the week, I just can't get the image of that grisly bear out of my mind! So there's no way I'll be confident holding a call position), only to remember what I said in my pre-market analysis about it showing signs of bullishness (bullish hidden divergence suggesting continuation of upward move that began on Jun 12), and that it should trend with the market. But market was sending mixed signals well into lunch, and oil was going up. Didn't expect the market to go into positive zone, and with GS gradually showing signs of reversing to an uptrend, what I saw was a lack of good reason to continue to trade for the day.
__________________________________________________________________

Pre-Market Analysis for Jul 9's session

GS Daily Chart



Yesterday's price low was lower than that of the previous day's, while MACD's histogram has become less negative.

What this is telling me is that I can still depend on my blue channel for support and resistance. Profit taking will likely continue, and more buying is possible should the positive market sentiments prevail.

GS 7/8 (Trades)

2 Scalps. Entered using yesterday's S & R - mainly those provided by the hammers.

Pre-Market Analysis - GS 7/8

GS Daily Chart

I see a Bullish Hidden Divergence for period Jun 11 - Jul 7, and that tells me that GS is Not likely to close below my blue channel (refer to chart above). In fact, after the sell-off yesterday (which continued after-hours), I'm expecting some short covering in the first part of the trading session.

Charts aside, outlook remains grim for GS. Bloomberg reported that the company has "lost money on 20 trading days during the quarter, including 9 days with losses of $100 million or more..."

Light sweet crude fell further (65cents down) but not enough to boost investors confidence. Dow, Nasdaq and S &P futures are all down for now. Will see what happens after Bernanke's speech later today.

My view on where GS is going today: the first move is probably up, (GS is currently trading below yesterday's close and is likely going to open lower than this closing price), followed by a dip or a plunge, depending on how bearish market sentiments are.

Truth is, I can't see a definite trend. Gut feel tells me that GS is going to be trading sideways for the week.

GS 7/7 (AAR)

In my pre-market analysis yesterday, I said that as far as the week goes, GS is going to be trading within a confined range of 167 - 184. And if it breaks out of 184, it might just have enough momentum to hit 203.5.

I also said that it's possible GS could trade up at yesterday's session, as the market seemed rather upbeat over the drop in the price of oil.

At the time of my journaling, Brent Crude futures was down just $1.75, and as I mentioned, I expected it to continue to drop further because of the bearish patterns (bearish engulfing pattern at top of uptrend; bearish MACD divergence) I noticed on its chart:



I was not expecting GS to follow the general trend of the market (ever so often, it displays its own trend), but I was willing to be flexible given the very bullish mood in the market then.

And that was all before I caught the news about the regulations that Fed announced it was going to impose...which hit the finance industry, in particular, GS, really hard. This was how much worse GS did compared to her counterparts:



In any case, when yesterday's session began, DOW was going up, up and up, and GS looked set for on a free fall (it did pause now and then on its way down - by consolidating - and only rallied during the last half hour of the entire session).

By then, of course I had gotten wind of the bad news that hit the financials. Actually 2 hours before market opened I did. I told D that I might have to buy against the direction of where I said GS would go for the day, effectively breaking a promise to myself that I wouldn't do that.

But then again, as I said in my earlier entry, whatever analysis I've done, I'm ready to change my views whenever new information surfaces that warrants my reassessing what I've thought and said prior to that.

On top of that, I always keep the big picture in mind.

At the back of my mind is always a huge grisly bear engulfing GS, drooling all over her and waiting for the right time to consume her.

Hence, I bought puts throughout. 3 scalps that I showed in my previous entry.

The 5-min chart that I look at for scalping & daytrading:



At the appearance of a hammer (look for candle in a red box in the chart above) at 1pm EST , whose low incidentally sat on my fib 161.8, I waited for GS to rally coz I wanted to take the ride down if it ever rallied up to 172.3 (where the tip of the upper shadow of a shooting star was touching - more on shooting star later).

But the market had turned so bearish (thanks to financials) by then that even a hammer (2 in fact, side by side) couldn't do much for GS, and it found resistance at Fib 138.2 %.

2 spinning tops sent GS back down but I was not ready to enter a put.

Hammers have an effect on me. I respect supports that come from a hammer at the bottom of a strong down move.

I wanted GS to break down below the support at 161.8 (where the hammer sat), come back up again in the form of a healthy rally, hit what I saw as a key resistance from the shooting star I mentioned above (refer to GS' 5min chart and look for the candle in a blue box), and then I would take the ride down from this top.

"You've exceeded your target for the day, let's turn in early", said D, after I told him my plan.

D probably didn't think a rally is going to happen.

But I expected it to, coz there had been only one very meagerly profit taking before 1pm EST - after the completion of each bullish pattern, which would otherwise have encouraged buying, GS merely went sideways - and I found it hard to believe that there would not be a real rally at least once for the session.

But I went to bed anyway.

And this morning, it was D who went to check the charts the first thing after he got up.

"It happened! At 3:35pm EST! You would have had to wait til then!" He reported excitedly from our study's as I was struggling out of bed.

"Dear, I used to trade in that window, whenever you were sound asleep".

*&$%#@%&*@#(*!

It would have been a nice ride down, as I would have stayed in the trade longer, letting my profits run. Why the confidence?

Coz what halted the rally was an engulfing pattern. Most importantly, the engulfing pattern validated the resistance produced by THE shooting star from 1240pm - the one I had counted on to put a robust ceiling over the bulls. It was a resistance level that I would have trusted.

I accept that trading involves risks, and that losses are inevitable and are part of the cost of doing this business. What I don't, and will never accept, is the taking of unnecessary risks. To go short on a stock that has tested an unconfirmed resistance just once, is, to me, not too different from betting on a horse that has just won its first race.

But in the event that I have taken all the necessary steps to defend my trades, and still make a loss, I would accept that particular loss and take whatever learning lessons it has to offer (sometimes, there's just nothing to learn coz the reason behind a losing trade might not surface immediately, or ever, and I also accept that).

Well, I'm happy with my 3 winning trades, and, 4 hours of beauty sleep.

GS 7/7 (Trades)

3 Scalps for now:

Over and Done With

Seabloke, thanks for having stood by me throughout these 4 really lousy months.

There must have been a dozen times that I was so close to throwing myself out my 27th storey unit that I have made it a point to steer clear of my windows.

There were times that we discussed - over kaya toast and nicotine breakfast - what would be the most comfortable way to die and even took into consideration what effect the method with which we use to kill ourselves would have on our fresh corpse.

You've been a gem. Coz you know me so well :-) Never once did you make an attempt to talk me out of thinking morbid.You joined me instead and made fun of death. Never once did you deliver any motherhood statements. You *bleep* more than me, and seemed even more pissed than me over things that bugged me.

I'm done being mad. Am taking down the angry entries and putting things behind me. Life is so short. For everybody.

By now, I've lost track of who started it first.

I just know I want to let live. And I want to make peace - with myself.

Say bye bye to the *bleep* *bleep* entry :-)

Love ya!!

Pre-Market Analysis - GS 7/7 (Weekly Analysis)

5-Year Monthly Chart




At a glance:

Primary Trend is Up
Secondary Trend: Consolidation after Correction

On closer look, these are what I see:

Although bulls have been in a steady climb since 2005 with only 3 relatively mild bearish months in 2005 and 2 in 2006, the picture changed drastically in 2007, where bears took control half the time.

Granted that the beginning of the 4th quarter saw bulls taking just 2 months to accomplish what the bears took more than 3 months to pull off, bears had succeeded - month after month for 5 consecutive months - in recovering all that they've lost, and price was back to around where it opened in Sept 07, from where the bulls began their 2-month rally.

The length of Feb 2008's candle is an indication of increasingly bearish sentiments.

The following month, however,saw the bears taking a break.

One would think that the hammer that formed would have given buyers some confidence to come in since a hammer after a strong downward move typically spells trouble for the bears, especially when the low of the hammer is reinforcing a support from 2006.

But that didn't happen.

It didn't seem that the bulls were ready to take the helm. Although we did see some buying interest in the month that followed, the rally was short-lived. The month after saw bears taking from the bulls as much as 75% of what the latter had gained.

What I'm seeing is that although the bears have gone on another holiday, the bulls are hardly a threat. In what is primarily an uptrend since 2003, the bears are making increasing bigger corrections and for longer periods each time.

Nobody can predict what's to come, but it's logical to infer that the prevailing sentiments (well, charts' all about sentiments, isn't it?) towards the ailing financial sector, rising oil prices, and a sluggish US economy will definitely continue to put downward pressure on GS' prices (overlay a dow and S & P chart on GS' and you'll see them dancing together, with GS sometimes taking the lead!).

I'm not optimistic about GS's rebound (at least not within this year) from the 50% Fib level it's sitting at now to its high in Oct 07.

Again, simply put, I can't see any indication of a major reversal to the upside for GS in the next few months to come. At least not according to what I see on my monthly chart.

Zooming in to my weekly chart, For the Week of Jul 7



I'm seeing patterns that counter one another:

- A hammer in late Aug sending GS up, only to have

- A shooting star in late Oct took it all the way down

- A bullish engulfment disrupted the plunge but didn't send prices back up immediately despite the long bullish candle

- A short rally ensued after 4 weeks of consolidation and found resistance at April's support, which was also resistance from Dec 2006

- GS corrected to support level shown in red dotted line (reinforcing late Aug's hammer's support)

- A bullish outside bar in the week of Jun 9 was formed and GS rallied for a week

- A bearish engulfing pattern is formed in the week of Jun 23, but whether it will halt the rally will depend on how determined the bulls are and on this week's general market sentiments.

If oil prices indeed continues to slide (Brent crude oil chart showing bearish divergence and also a bearish harami), market's going to move up accordingly. When that happens, and if GS' going to trend with the market, we should see a spike in GS's prices. Why? Because for GS to move up against its longer-term downtrend, there will have to be a heap of optimism and/hence momentum!

So this is what I see:
- Oil has come down by $1.75 from thurs, sending Dow up
- GS has a reinforced support at around 167
- On its intraday chart, GS has closed higher than it's previous day's high on an uptrend (on 5 min chart)

Putting everything together, it seems unlikely that GS will drop today.

For the week, it looks like GS will trade within the box range defined by the the support at 167 and resistance at 184. If it breaks through the ceiling of the box, it's likely to aim for 203.5

It looks possible to me that GS could be trading up today.

A New Approach to Using the RSI (Part 1)

Check out this link and see how the RSI - a widely used indicator - is being used with a twist: http://www.tradingacademy.com/news/TradersJournal_BrandonWendell.pdf

If you don't at least take a quick glance at the above before reading on, it's likely I'll lose you...right about...NOW.

This is the journaling of my backtesing of Connie Brown's method (please refer to link above for detailed description of the said method). I'm doing this for the friend who sent me the link and also for my own learning purposes. I've not used the method to trade at all and I strongly advise those who intend to apply it in their trading to first do their own backtesting, then paper trade first before using it in real-money trades.

As Connie Brown's method requires trend confirmation before it can be used effectively, I've added these moving averages for trend determination: EMA 7 & EMA 21. I've decided on these numbers after testing out various other combinations of periods. Backtesting is done on the stock that I'm actively trading: GS.

If you're trading a different equity or instrument, you will have to play around with the number of periods, and also see if the EMA or SMA, or a combination, fits more with the price data of what you are trading. Which MA you use, and the number of periods used, will be based on such factors as the volatility of what you're trading, its trending characteristic, and your personal trading style.

The number of periods most commonly used are: 21, 50, 89, 150 and 200 days. Certain equities use periods of 70 and 100.

I've chosen EMAs and the periods 7 & 21 because I am a very short-term trader, and this setup's degree of sensitivity to signals suits my risk appetite.

I've also adjusted the oversold line for bearish trend to 20 from the 25 that Connie Brown uses, because when tested on GS, 25 sends premature exit signals too frequently. Based on my observation, divergences above the adjusted 20 line make better exits.

The following chart shows an example of how I MIGHT use Connie Brown's method:



In the RSI panel, you'll see various overbought and oversold lines. Ignore the 2 white lines representing 70 and 30. The ones we are looking at are:

For bullish trend - Blue solid line that represent the OVERBOUGHT line ; Red solid line for OVERSOLD

For Bearish trend - Blue DOTTED line that represents the OVERBOUGHT line; Red DOTTED line for OVERSOLD

Briefly on GS' movement prior to May 7: GS was trending down for 2 days on May 2 and May 5. On May 6, it climbed up to a high that's slightly higher than May 2's open, then took a slight dip but still closed above its open and near its high.

On May 7, the session opened with GS gapping up just a little from its previous day's close. As seen in the 5-minute chart above, GS's first move was a dip. The 2nd candle that I've labeled S1 seems like a good place to short the stock because:

1) RSI has crossed over the 50 overbought line (represented by the blue solid line in the RSI panel) from above
2) MA is seeing a bearish cross-over
3) MACD is also showing bearish cross-over and going into bearish region

However, I wouldn't enter a trade here for the follow reasons:

1) S1 sits on May 6's support - given GS' tendency to vacillate markedly in the first hour of the trading session, I'm not sure "down" is the direction it'll continue to take. The length of the bearish candle before S1 would have made me really uncomfortable as i would expect some profit taking following that.

2) To enter at S1, my stop loss would have to be at the high of the 1st candle of the session - the risk I would have to take is far too big for an unknown profit potential. Putting it in another way, the cost of this trade would be too high for me personally.

So much for today. Examples of 2 trades that I would enter will be shown in Part 2 of this topic.

Shell

This is NOT an entry about SHELL the oil company.

Shell is what my home is to me.

This blog entry is about my new home (I have to give Seabloke some incentives to check in here now and then...she's complaining that my blog's getting very BORING)

I love my new home.

Ok, that's an understatement.

I LOVE, LOVE, LOVE my new home!

This 100 square meters living area totally confused the curtain guys (all of whom I like to call the "blind men" coz I have more blinds than curtains...haha...yup, EVIL's moi's middle name....) when they first came in. They couldn't identify the rooms; they couldn't find any, in the first place.

That's because all the walls within the unit, with the exception of the one that forms the building's pillar, have been hacked. In their place I've put in 1) a glass door & panel, 2)a dark wooden sliding door (which is actually the door of my mammoth study cabinet and 3) NOTHING.

The men were looking for my bedroom, which was concealed behind the studies.

My study room - my favorite hangout - is separated from the main living space by a glass panel and door that are usually wiped so clean by my cleaning lady that you probably won't be able to make them out, visually, until you knock your nose (or your forehead, whichever is the one that's jutting out) against it.

On most days, I would "unhide" my bedroom and open all my blinds and curtains. The unit becomes a bright and spacious studio.

Did I mention that my home has only 2 colors?

Black and pale lilac. My favorite colors.

In black are: the flooring, the cabinets and wardrobes, the sofas, the settees, D's lazy day-bed, the piano, the platform bed (from where I can see the entire night sky with its twinkling stars when i lie down to sleep - I live high enough to not have any buildings block my view), etc.

In pale lilac: my walls

Everything else that's not black or lilac is glass. Well, except for Al and Keisha. Al is bluish gray, and Keisha is beige.

I know Seabloke thinks my home is COLD. But that's the way I like it, and COLD is so ME.

I've never liked the warm and earthy colors that Seabloke loves - the brown, the orange, the red, the yellow-beige - and I don't really fancy bright colors (the only bright-colored thing in my home is a bright green stool which serves one key purpose: for my little nieces to sit on when they take off and put on their shoes during their visits).

And I utterly hate clutters. The fewer things to get in my way as I move around the house, the better. Hence there's absolutely no loose, dangling decoratives or displays - everything is mounted on the wall and all things that are not fixtures are hidden from view. The place is designed to allow lots of space for Al and Keisha to dash around wildly without having to make an e-brake every 2 meters.

My home is a model of what I want my life to be - clean, cool and bright, with lots of space, no messy clutters, no standing ornaments to trip me nor delicate displays to maintain. My curtains and blinds are made of pure synthetic material (D likes to call it "non-organic") - I made sure they are, coz I don't want anything eating and growing on them.

Yes, I have to agree whole-heartedly with Seabloke (ok, honey, I know you've never said it, but I can see it written all over your face :-) ) that my home is cold. But like I said before, and I cannot emphasize this enough: I LOVE it COLD.

I've gone through enough to appreciate a colorless life. Everything I'm looking at now gives me the visual comfort that I cannot find any place else.

Besides, I do get my healthy and regular dose of color and warmth - from Seabloke, my darling nieces, Pilot, and Ken.

And occasionally, I get more warmth than I ask for from D. But those are more aptly called "fires" - the kind that you FIGHT.

:-D

Pre-Market Analysis - GS 7/3 (Correction: No Belt Hold)

Pulled up GS' daily chart today and noticed that the candle for Jul 3 is different from that which was initially captured.

This is the updated chart showing a candle with a smaller body and a longer upper shadow (hence effectively disqualifying it as a belt hold):



This is what I see when I look at the daily chart: granted that GS gapped up for 2 consecutive days, the body of the bullish candles were getting smaller and the upper shadows are getting longer (upper shadow represents sellers). The high of Jul 3 has also hit what is by now a 5-month resistance.

Volume has dipped significantly from above average on Jul 2 to way below average on Jul 3 - but given that Jul 3 was the eve of a major holiday, the dip is hardly a surprise. Of course I could choose to look at the unimpressive trading volume as a sign that a reversal of the primary trend (ie. DOWN) is at least NOT around the corner.

Simply put, when I look at GS' daily chart, I just don't see it going up from where it is now in the next few trading days.

Zooming into the intraday (hourly) chart, this is what I see: in an uptrend (more precisely, a 3-day rally in what seems to me to be a general downtrend), GS has gapped up moderately, then dipped gradually and continually to its close. In a full-session trading day, if GS' uptrend has any strength, it ought to have rallied from its first dip back up to at least its open price. Since Jul 3 was a half-day session, it's difficult to tell if its closing without having ever rallied from its dip (after gapping up in an uptrend) actually means anything.

For now, based on the daily chart, it seems that GS' upward move from Jul 1 has lost momentum.

Personally, I like to do a thorough analysis on my weekly and monthly charts for the bigger picture once a week or whenever the prevailing trend seems to be losing strength or when I am totally confused by what I'm looking at on the daily chart.

But that's not going to happen tonight...In any case, charts can tell whatever stories they want to tell, what's fact is real-time price movement.

In a nutshell, before the market opens on Monday, it's rumors, news (on GS, on the other sector leaders, etc), the things that Fed says and does, general market sentiments (movement in the indices) , movement in oil prices (which should be reflected in overall general market sentiments anyways, so I'm going to forget my crude oil chart - I'm going nuts looking at charts!) that will have a more immediate effect on the movement of GS.

Pre-Market Analysis - GS 7/3 (Belt Hold)

I was looking at GS' daily chart and noticed that yesterday (Jul 3)'s candle is a Bearish Belt Hold(circled in green on chart). The high of the candle touches a 4-month resistance that I've drawn by using the low of the hammer that was formed on Jan 9.

The resistance was broken only on Apr 24 with the closing of a long bullish candle above the line. GS subsequently came back down, broke through the line and went further down before going back up to test the resistance again in mid June.

The appearance of a bearish Belt Hold candle suggests either a reversal of the upward move from Jul 1, or a consolidation. The belt hold line is significant when it confirms a resistance - in this case, the 4month resistance mentioned above.

Should GS close above this line in the coming week, it will be a signal that it will continue its uptrend along my green channel (refer to chart).

I will be looking at the weekly and monthly charts to get a bigger picture.

Meanwhile, the daily chart's telling me that 182.3 to 183 is GS' very short-term resistance.

GS 7/3 ( AAR)

So today turns out to be a really bad day to trade. Session ended early at 1am. Might as well...

Was having a breather with D and talking about my trade when he told me that several times during the session, he had wanted to buy a put after I exited from my trade. I asked him for his basis for wanting to enter.

To which he replied,"coz you said it's a down day. And you went and bought a call. hahaha..."

**&%#(*#$*&%%##!

Ok, I did tell him that. I have this habit of telling him just prior to market open, after he knocks off from work, how I think GS is going to move for the day. Most time, I tell him whether it's going to be a bearish or bullish candle on the daily chart, what the range is and how long the body is going to be. For today, I told him GS' going down.

But of course GS gapped up from its close of 178.79 yesterday and opened at 181.95 today.

D stared at his screen and gasped,"GS's going up!".

I was looking at something else on my screen (probably reading my mails, surfing some unrelated sites, etc)."It will come down" I commented casually.

I usually ignore the first half hour of the action coz GS behaves erratically at the start of the session frequent enough for me to not want to waste my time and energy staring at the screen.

When asked how much it will go down, I told him about my green channel and said it should stay within.

So when GS was around $181.2 (shortly after I close my losing position),where price was not too far down from the day's high, D was tempted to buy puts - he figured the only way it's going from there is DOWN. Coz I said so, according to him at "confession time" (see, I always ask D for reasons he wants to enter a trade, just to ensure that he actually has a strategy, and not just using his "gut feel").

And so after market closed at 1am, when we were having a smoke outside our home (the common walkway with a scenic view 27 storeys below shared by us and our only neighbour), D started counting the number of winning trades he would have made had I not stopped him from executing them. I was amused and teased him about his "gambling" style of trading.

He quickly countered that I was worse, and that in future, I should print out what I wrote on my blog and have my "prediction" highlighted so I'll not trade against it.

He got me :-)

GS 7/3 (Trades)

Losing trade.



Bought a call in an uptrend and entered on technicals.

Good setup in both 5 and 10 min time-frame.

Exited/cut loss once a doji emerged.

GS consolidated and went down in a series of long-bodied candles after that; at the time of my writing (at 1130pm), GS has never gone up to the level where I entered my trade.

I'm glad I cut my loss in the nick of time.

Mistakes and failures always offer a lot more to learn than successes. What I learn from this trade is:

1) Volume is important - despite the good setup, volume was low, way below the average

2) NEVER to trade against my own view of the direction of the stock - this is my third loss since I started trading with real money and on all three occasions, I traded against the direction of what I thought GS would go for the day. It could be a confidence issue, or it could simply be that all my preparation prior to the open of the session has given me a fairly accurate prediction of GS' trend and I should really adhere to my view...

3) Never to enter during a choppy session - market has been really choppy and GS has been going up and down with the market. Inspite of that, I entered. Pure arrogance on my part to think that I can now trade in the window that I have before today always avoided trading in.

4) Doji is magical. Almost always halts an on-going trend.

Pre-Market Analysis - GS 7/3

Very briefly, my take is that GS is continuing in its current downtrend within my pink channel. Range is probably 175 - 180 (enveloped by my green and pink channel). Given the bleak market outlook and sentiment, GS is not going up further from it's slightly upward move yesterday. At least not today.

GS 7/2 (Trades)

There's only one word to describe tonight's session: havoc.

I missed the only good setup to buy calls (In my earlier entries today, I did mention that I was expecting gs to continue to trade within the uptrend channel on my daily chart)- coz I had gone to take my nice warm shower...$%*#(@(* - and bought mostly puts (going against my take on gs' movement...well, I was being flexible and going with the trend...after all, trading is more of an art than hard science to me...)

Anyways, today's definitely not the most fantastic day to trade.

Nonetheless, I did 5 scalps, and none was based on technicals. 4 was profitable; 1 was a loss. Net loss: 13cents per contract.

Something I learnt about myself - trading is more like a game to me than a way to make my living. I am quite sure I'm starting to get addicted to scalping...I'm not as sure that it's necessarily a bad thing though.

Anyways, here's a snapshot of my trades today:



GS' daily chart showing today's candle (traded up my green channel indeed):

Pre-Market Analysis - GS 7/2 again

Think I see a Bullish Divergence too...gs could be going up towards channel's resistance in the next few sessions.



Was just looking at DOW's daily chart and noticed a long-legged doji followed by a hammer; on top of that, i see a bullish divergence. I'm seeing bullish signals. Job data looks really bad, and oil is hitting higher highs - throw in credit crunch issues and inflation concerns - and I see a downtrend that's continuing. If DOW goes up today, it'd merely be another correction.

Pre-Market Analysis - GS 7/2

On GS 1 Jul 08



Candle for yesterday's session is sitting on the floor of the green channel that was drawn yesterday (see entry on GS 1 Jul 08). Candles are not forming any significant patterns - other than the tug of war that's going on between the bulls and the bears at higher than average volume in the past 3 sessions. Bears seems to be losing steam and bulls are making some progress..but given that yesterday's bullish candle closed so near to the low/close of the bearish candle 2 sessions before, I tend to think that gs' likely to trade quite flatly today.

Now, on non-farm payroll... Well, that's tomorrow, and I really think that the market has already priced in their expectations by now. So I'm going to skip it. Life's complicated enough.

Back to my daily chart above. I see a Bullish Hidden Divergence - which means that I can still assume that my green channel is reliable, provided that there's no surprise coming from the market or the US government...

Without too much else to rely on, and to make my life simpler, I'm going to give my channel a little faith ie. gs is not going to go down further. My gut feel (very bad words, I know. Can't help it. I haven't a crystal ball. Who does anyways??) is that GS' likely going to go sideways, with small bodies and within a moderate range of $4-6.

Ok, I'm done playing prophet for the day.

2692

Thanks, 2692, for your comments.

I don't know who you are, but based on how much you know, I'm guessing you're from within the circle.

I appreciate your advice. The result of my trades tonight is an indication that my state has not been affected ie. I've let live :-)

Thanks for having made my night. :-)

GS 7/1 (Trades)

4 Scalps for now (1st half of trading session). Time for a nice warm shower...



Today turns out to be a really nice day for both scalping and momentum trading. 2 divergences after 1225pm- one bullish, followed by a bearish - offered 2 very clear trends based on which one can make quite a killing during the 2nd half of the session.

Here's a snapshot of all my scalps today: