Friday, April 30, 2010

Daily Reflection: 04.30

Great buy, or head for the hills? GDP rose 3.2% in the first quarter leading to signs of a growing economy. The Put/Call Ratio closed above 1.0 at 1.06 indicating a high number of puts on the books, theory being do the opposite. Stay tuned for a full market analysis.

Thursday, April 29, 2010

Daily Reflection: 04.29

It seems as though nothing can keep this market down. The VIX fell back into the teens and the indices ripped back up towards prior highs. Whether we can break these highs or fall short will be crucial. There’s lots of economic news tomorrow including GDP before the bell.

Wednesday, April 28, 2010

Daily Reflection: 04.28

The market rebounds today slightly after yesterday’s decline. We would not be surprised by further downside, however chopping around between these levels and prior highs are more likely for the remainder of the week. Tomorrow we have Jobless Claims and Nat Gas Report, Friday we have GDP before the bell.

Tuesday, April 27, 2010

Daily Reflection: 04.27

Another huge volume day accompanied by a 5 pt jump in the VIX. The noteworthy relationship here is that the last huge volume day occurred on the last big down day (4/16). We have broken immediate trend line support, but we will wait for the FOMC meeting announcement tomorrow to make any major shift in bias to the downside. ...and oh yeah, Goldman (GS) closed positive on the day.

Monday, April 26, 2010

Daily Reflection: 04.26

This week will produce a sharp move. Expect it. Today we showed larger volume with sideways chop, ending the day with a victory to the bears.

Sunday, April 25, 2010

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Wk16: Market Recap

A little triangle at highs broke out on Friday sending the market upwards once again. For those looking to jump on board I would caution and wait for the talking heads on CNBC to use the verbiage, “This market cannot be stopped,” or “Everyone needs to jump on board.” Then go short.

Wk17: Market Forecast

In the week ahead look for these news announcements to act as potential market movers

We have the FOMC Meeting Announcement Wednesday at 2:15 PM EST, expecting the FED to keep rates unchanged for “an extended period of time,” but as in pat announcements the wording will be the focus. We also have GDP on Friday before the bell. We’re still looking for some hesitation at the S&P 1225-1230 due to the fact that the 61.8% line from the weekly timeframe is here. If we blow right though this level then we will continue up to prior highs at 1575, making a full retracement. The NASDAQ and Russell are almost there.

Friday, April 23, 2010

Daily Reflection 04.23

Welcome new highs of the year. It didn't take long. We'll have a full recap this Sunday. As long as we continue to hold our long setups, we will remain in a long bias. Once a long setup is broken we can reevaluate and look to get short. As always though, if you are seeing profits in some of your long positions, now would be a good time to either scale out of a portion, or add some downside hedging such as puts on weak companties etc.

Thursday, April 22, 2010

Daily Reflection: 04.22

Happy Earth Day. While we may have temporarily double topped in the /ES, look for new highs to be made very soon. Once we get a new high we can draw our next retracement level and look for an entry.

Wednesday, April 21, 2010

Daily Reflection 04.21

Well, it appears we have put in a double top on the S&P, but let's not speak too soon. The Russell broke to new highs today. Keep positions manageable during this time as earnings can whipsaw the market, especially at the open and close. A break below today's low will confirm the double top on the S&P.

Daily Reflection: 04.20

Two things can happen from here, we either break through previous highs, or double top. Watch out for earnings this week.

Monday, April 19, 2010

Daily Reflection: 04.19

A nice little bounce in the markets today as the market digested the Goldman Sach’s news and Citigroup earnings. Above 1199 in the ES and we are bullish, a break below 1177 we are bearish.

Sunday, April 18, 2010

Wk15: Market Recap

A nice rally was quickly erased last week on the Goldman Sach’s alleged fraud. In the larger picture we have not broken any trend line support and continue in a nice uptrend. However, the extremely large volume on Friday is concerning. We must remember that it is not the news itself that is important; it is the market’s reaction to the news that matters. The DOW remains over 11,000 and we remain in our trend, no need to overreact.

Wk16: Market Forecast

In the week ahead look for these news announcements to act as potential market movers

We are getting into earnings season once again and with the emerging news of the Goldman Sach’s allegations we could see more volatility in the week to come. On the news front Thursday and Friday are the major days this week. Our target on the S&P remains $1228, but if we break $1186, then we do have the possibility of going back down to $1121.

Saturday, April 17, 2010

Daily Reflection: 04.16

Wow. Lofty allegations from the SEC towards Goldman Sachs hit the wire today sending the markets lower. The question becomes, is it the news or the technical patterns that actually move the market? I believe it is the news that acts as the catalyst for the technical traders to confirm their theory. Extremely high volume today, however the DOW still managed to close above 11,000 and on the bigger picture we are simply at a “healthy” pullback point. Look for more reaction Monday.

Thursday, April 15, 2010

Daily Reflection: 04.15

Tax Day, have you made your max IRA contribution for 2009?

6 straight days up and only 2 down days in the past 3 weeks on the S&P, this market is on a tear. Closing a portion of swing trades at these levels would be a great way to lock in profits, but still allow for more gains to be had if we continue to move higher. Tomorrow is options expiry and could be a little wild in the morning as we have Housing Starts and Consumer Sentiment coming out as well.

Wednesday, April 14, 2010

Daily Reflection: 04.14

The market's professional gap today was lead by the Semi and Bank Index's. The NASDAQ posted one of the highest volume days so far this year, likely due to Intel's earnings. We touched our 1205 target on the /ES and the next long setup would be 1196.75. Today we had a Put/Call ratio close of 0.56, a sign to get short, however we will still look to buy the 1196.75 level given the risk/reward of 4:1. Watch for a failure point of 1193.00 in the /ES.

Remember options expiry is Friday so we could see some wild price action in the morning and we are getting into heavy earnings season. Make sure you're aware of earnings announcement on the stocks you're following.

Tuesday, April 13, 2010

Daily Reflection: 04.13

The market cannot be stopped, or so it seems. Breadth was bearish all day today (while only slightly at -1.5:1 most of the day), but we continue the trend higher. Today's price action was very similar to last Thursday only today we had a few pullbacks intraday. The morning allowed for a nice entry into the /ES daily swing long at 1185.25 and it touched to the tick. Our target is 1204.50 (once again new highs).

Market Profile

Monday, April 12, 2010

Daily Reflection: 04.12

The total Put/Call ratio is inching lower closing the day at 0.68. Oil has been at a standstill at the $85 level while gold continues to rise, up $50 an ounce in 2 weeks. Copper futures (/HG) are coming off their highs, but not yet in a bearish pattern. Copper has been a market leader in the past few months. The VIX cracked 16, and oh yeah, volume continues to drop. All bearish signs, HOWEVER we must always remember that if everyone is expecting the same thing, the opposite is likely to occur. Our line in the sand is a move on the /ES below $1181.

Sunday, April 11, 2010

Wk14: Market Recap

We saw similar price action in the markets this week as compared to last week, only instead of doji bars, we had large body candles. The lower volume is a concern, but we will continue to trade the setups in the market until they fail and the trend reverses.

Wk15: Market Forecast

In the week ahead look for these news announcements to act as potential market movers

Options Expiry and moderately packed news week!

The market is on a tear higher and continues (ES +5 PTS) as I post this Sunday evening around 8:00 PM CST. One thing we must always remember is that no matter what our opinion is on the market and its future direction, we must not fight it. Trade the market, not your opinions. Our S&P target remains at the 1225 level.

Friday, April 9, 2010

Daily Reflection: 4.09

Closing just shy of our 1195 target (Long from 1172.25) on the S&P, indications are pointing to a lower Monday.

Note: next week is Options Expiry and this tends to induce a bullish trend.

Some of the things we look at to indicate daily swings in the market are the $TRIN and Put/Call Ratio (which we talked about this week). We had a close of .71 today on the Put/Call Ratio. This essentially means consumers are getting overly bullish and professionals will be selling and shorting. Regardless however of what any indicators show, I will not fight the trend. IF we sell off at the 1195 level our next long setup would be 1183.

Have a great weekend!

Setting up "Styles" in TOS

Thursday, April 8, 2010

Daily Reflection: 4.08

We had a daily ambush long setup on the ES early this morning at 1172.25 with a target of 1195. While the price action of yesterday and today has put the bears on the radar we're not going to fight the trade. If we do make it to the 1195 level we will be looking for either a hard sell off or continuation to 1207. Monday's price action set a nice tone for the week, but intraday setups have been thin. Tomorrow we only have Wholesale Trade at 10:00 AM CST so we could make it to 1195 by the end of the day.

One more thing to note however, the Semeconductor index (SOX) closed as the worst sector in the core sector list. For a sustainable rally to occur, we need the Bank Index (BKX), Securities and Broker Dealers (XBD), Biotechnology (BTK) and the SOX to show strength. The Bank Index on the other hand has continued to break out to new highs.

Wednesday, April 7, 2010

Daily Reflection: 4.07

Oddly enough, the NASDAQ breadth trended up most of the day while the NYSE was trending down. The Dow remains the lager of the top line figures with the Russell and NASDAQ leading the way as is typical in a bull run after a recession. Intraday trading was extremely choppy today and after the first hour or so it was pretty clear that sitting on hands would be the best plan for the day.

This type of day in Market Profile terms is called a “Running Profile” in reference to prices establishing an initial balance, moving in one direction, then reversing and breaking out in the opposite direction. This produces many failed setups for intraday traders and ends up forming a doji or spinning top on the daily chart.

Tuesday, April 6, 2010

Daily Reflection: 4.06

I’m not buying this latest breakout, but has made for some nice intraday trading this week. BANK broken out to new highs today and was the first indication that we would move higher at the daily pivot. Today was a very technical day on the EUR/USD, as well as ES. The bias this week is clearly more upside, so we will remain cautious as a push lower should come in the form of a large body candle in one swift move.

Monday, April 5, 2010

Daily Reflection: 4.05

Today’s price action was had on lower volume. This is typically a sign of lack of follow through. The Put/Call ratio closed at 0.79, readings below 0.6 are seen as very bullish, reason being everyone is short and there are no more sellers.

In other news, oil cracked $86 per barrel and gold & copper continues to rise. Keep an eye on Freeport-Mcmoran (FCX).

Sunday, April 4, 2010

Wk13: Market Recap

Another week of daily doji candles, however we are moving slowly higher. Look to the support/resistance levels as actionable points. Use Monday (or the first day of the week) to establish the mood/trend for the week.

Wk14: Market Forecast

In the week ahead look for these news announcements to act as potential market movers
Pending Home Sales to kick start the week Monday followed by Jobless Claims on Thursday. Taking a look at the fibo 50% and 61.8% lines on the top line figures we see the NASDAQ and Russell are already well above their 61.8% line (indicating the likelihood of a full retracement). The S&P and Dow are approaching their 61.8% lines and it’s at these levels we can expect some hesitation.

Thursday, April 1, 2010

Daily Reflection: 4.01

We are starting a new section which we call “Daily Reflection.” This section is devoted to sharing insight from the day’s trading session, primarily relating to day trading the E-mini’s and Currencies.

We started the day with a gap up off the open. This tends to be a common occururance on the first day of a new quarter as well as the first day of the month. Typically these “professional gaps” as they are called, happen more towards the beginning of a trend rather than after a prolonged move up (as seen on a daily chart). We now have an unfilled gap below us (using the 4:00 PM EST close) at 1165.00.

After trending higher off the open with breadth ratios in the neighborhood of 9 : 1 positive (which is extremely high) we slid lower after the lunch session, bouncing slightly at the half gap and coming into the daily pivot where we reversed into the close.

One trick I like to use when dealing with pivots is calculate the next day’s pivot around an hour or so before the close. This is a general # and will move with the current closing price, but in the last hour the market tends to drift towards the following day’s pivot.

The pivot can be calculated simply by using the day’s (H + L + C) / 3.

The stock market will be closed tomorrow and futures trade a half day, this will likely be a thin market and with the Employment Situation number released at 8:30 EST, one you will probably stay away from. Enjoy the 3-day weekend and the beautiful weather we’re having (at least in Chicago).

Have a great weekend!