TJMacTrading

Futures Trading for a Living

2011-06-14T21:25:00.002-05:00

If you think you'd like to learn about trading for a living I invite you to checkout my new blog, EminiMind.com.

Thank You for your support!

Get Updates

2011-01-01T02:11:00.000-06:00

If you like what you've read you can get updates easily here.

We've moved!

2010-12-11T07:51:00.002-06:00

The new blog can be found HERE.

Bernanke on the Economy

2010-12-09T08:19:00.000-06:00

Getting Started in Tradng: Thinkorswim & Infnity Futures

2010-11-23T22:19:00.000-06:00

For those looking to get started in trading futures, or trading in general I can relay my personal recommendation with charting package thinkorswim and futures trading platform Infinty Futures. Both companies have outstanding customer service, something greatly overlooked in the trading/investment industry. Both are on the cutting edge of innovation in the industry. And, best of all both are free (for personal accounts; entity account who sign up with TOS will pay a monthly data feed of approx $200 for all exchange data). This is the duo I use for futures trading and have been members with them for years.

Tulip Mania

2010-11-23T20:41:00.000-06:00

Manias Panics and Crashes

2010-11-23T20:40:00.001-06:00

The Book Manias Panics and Crashes can be found at amazon.

Wk47 Analysis

2010-11-21T17:48:00.000-06:00

Thanksgiving week is here, which means the markets will be closed Thursday and a operate on a half day Friday. Monday is bleek for news, but Tuesday we have GDP and slew of news on Wedsnesday as well. Historically the day before thanksgiving is almost always an up day. Pretty meaningless for intraday trading, but a little something to make note of.

Politics Explained...In Cow Terms

2010-11-20T21:30:00.008-06:00

SOCIALISM: You have two cows.
The state takes one and gives it to someone else.

COMMUNISM: You have two cows.
The State takes both of them and gives you the milk.

FASCISM: You have two cows.
The State takes both of them and sells you the milk.

MILITARY DICTATORSHIP: You have two cows.
The State takes both of them and shoots you.

BUREAUCRACY: You have two cows.
The state takes both of them, accidentally kills one and spills the milk in the sewer.

CAPITALISM: You have two cows.
You sell one and buy a bull.

PURE DEMOCRACY: You have two cows.
Your neighbors decide who gets the milk.

REPRESENTATIVE DEMOCRACY: You have two cows.
Your neighbors pick someone to decide who gets the milk.

AMERICAN DEMOCRACY: The government promises to give you two cows if you vote for it. After the election, the president is impeached for speculating in cow futures. The press dubs the affair "Cowgate".

ANARCHY: You have two cows.
Either you sell the milk at a fair price or your neighbors kill you and take the cows.

Become Legendary

2010-11-17T17:32:00.001-06:00

Look out Below!

2010-11-16T22:09:00.000-06:00

With a hefty down day today where can we expect to take a breather? The 50MA of the S&P500 is approx. 1165 and that's where we are targeting for a breif pause.

Wk46 Analysis

2010-11-15T07:27:00.000-06:00

A great week ahead with options expiry on Friday. Everything will come down to the high or low of last Friday. If we break the high expect to make new highs on the year, if we break the low expect us to continue drifting lower.

Filing "Trader Tax Status"

2010-11-09T21:46:00.001-06:00

If you trade full time and even part-time you may be eligible for "trader tax status." This is especially prevalent if you operate your trading business under an entity such as an LLC. The biggest advantage to claiming “trader tax status,” is the ability to elect Mark to Market accounting. MTM accounting allows the trader to treat capital gains and losses as ordinary gains and losses. Filing under “trader tax status” also allows the deducting of our trading business expenses on a Schedule C.

I highly recommend the book The Tax Guide for Traders by Robert Green for anyone who thinks their trading falls under “trader tax status” or who has been trading professionally for some time. Green is the expert when it comes to trader tax laws and there are many tax advantages to your past filings by electing “trading tax status” on this year’s return. Green's website Green Trader Tax has a wealth of information as well.

"Fear the Boom"

2010-11-08T17:05:00.000-06:00

Week 45 Analysis

2010-11-07T08:40:00.002-06:00

A light week of news ahead relative to the monster truck rally of the fed last week. Ben Bernanke announced Wednesday that the US Central Bank it will buy $600 billion in long-term Treasuries over the next eight months.

What is Quantitative Easing?

Quantitative Easing or QE is a monetary policy implemented by the central bank to increase the money supply in the US Economy. In essence, the printing of money, except instead of printing pieces of paper with Lincoln, Washington, and Jackson’s faces on them, they are making it “electronically” so to speak, in the markets. The US Central Bank credits its own account with new money and then uses that money to buy assets, in this case long-term bonds. This leads to a weaker dollar, lower mortgage rates, higher inflation, and lower savings rates and potentially a bond bubble with the possibility of a massive recession.

As for new stock and option positions, go with what’s working. Now more than ever it is important to select those relatively strong and relatively weak stocks because in case of a correction (which is to some degree is highly likely beit large or small) the wheat will be separated from the chaff.

Market Internals are what we look to intraday to give us a guage of how the market is doing. Consider it like a heart monitor, measuring the markets pulse. See the video below for more.

Week 44 Analysis

2010-10-31T18:34:00.002-05:00

Another week packed full of news including FOMC Minutes Wednesday. Looking to finally break out of the range we have been in for the past few weeks.

As the month of October comes to a close, we see a market that has been very resilient of a pullback. Since we put in highs in the S&P futures at 1193 we have seen a market that has been quite choppy. With targets at 1201 which should be reached this week, don’t be surprised to see somewhat of a breather or pullback in this market. A pullback and possibly of a trend change could produce some exciting moves for new trader setups in November.

The bulls have defended many crucial pullbacks this month, especially the 1170 level. When looking at the SPY we see a max pain level of 117, which is the most amount of pain or "heat" option traders are willing to take before a trend change. This 117 level also lines up with a failure of a 61.8% line of our last bullish setup, in the /ES, 1169's. Look for a break or failure of this level for a possibly trend change.

Discipline is a 24-7-365 Job

2010-10-28T15:56:00.002-05:00

Discipline is not something you do 9 out of 10 times or only when you feel like it. In trading, breaking your rules “just this once” is a recipe for disaster. Don’t kid yourself, if you want to be consistent trading the markets you must remain disciplined every single day both in the trades you take and in your afterhour’s analysis. The more diligent and thorough your attitude towards the markets, the faster you will progress. In the markets you are paid based on your level of discipline. Remain disciplined 100% of the time, all the time.

The Mayonnaise Jar and 2 Beers

2010-10-25T20:23:00.000-05:00

When things in your life seem almost too much to handle, when 24 hours in a day are not enough, remember the mayonnaise jar and the 2 Beers.

A professor stood before his philosophy class and had some items in front of him. When the class began, he wordlessly picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar was full.

They agreed that it was.

The professor then picked up a box of pebbles and poured them into the jar He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

The professor next picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He asked once more if the jar was full. The students responded with an unanimous ‘yes.

The professor then produced two Beers from under the table and poured the entire contents into the jar effectively filling the empty space between the sand. The students laughed.

‘Now,’ said the professor as the laughter subsided, ‘I want you to recognize that this jar represents your life. The golf balls are the important things—your family, your children, your health, your friends and your favorite passions—and if everything else was lost and only they remained, your life would still be full.

The pebbles are the other things that matter like your job, your house and your car. The sand is everything else—the small stuff. ‘If you put the sand into the jar first,’ he continued, ‘there is no room for the pebbles or the golf balls. The same goes for life.

If you spend all your time and energy on the small stuff you will never have room for the things that are important to you.

‘Pay attention to the things that are critical to your happiness. Spend time with your children and grandchildren. Spend time with your parents. Visit with grandparents. Take time to get medical checkups. Take your spouse out to dinner.

Play another 18. There will always be time to clean the house and fix the disposal. Take care of the golf balls first—the things that really matter. Set your priorities. The rest is just sand.’

One of the students raised her hand and inquired what the Beer represented. The professor smiled and said, ‘I’m glad you asked.’

The Beer just shows you that no matter how full your life may seem, there’s always room for a couple of Beers with a friend.

Week 43 Analysis

2010-10-24T18:29:00.001-05:00

We have seen a lot of chop around the S&P 500 $1180 level. This can be expected as we are in the midst of earnings season. We should see a break one way or another this week especially with GDP on Friday.

As a clue to the direction of this break we look to the VIX and as of late, it has been on the decline, holding in the upper teens. In order to sustain new highs we would need the VIX to break $17.90 and hold it.

2011 - Stock Market Holidays

2010-10-23T21:10:00.001-05:00

Martin Luther King, Jr. Day
January 17, 2011

Washington's Birthday (Presidents' Day)
February 21, 2011

Good Friday
April 22, 2011

Memorial Day
May 30, 2011

Independence Day
July 4, 2011

Labor Day
September 5, 2011

Thanksgiving Day
November 24, 2011

Christmas Day (observed)
December 26, 2011

2010 - Stock Market Holidays

2010-10-23T21:08:00.001-05:00

New Year's Day
January 1, 2010

Martin Luther King, Jr. Day
January 18, 2010

Washington's Birthday (Presidents' Day)
February 15, 2010

Good Friday
April 2, 2010

Memorial Day
May 31, 2010

Independence Day (observed)
July 5, 2010

Labor Day
September 6, 2010

Thanksgiving Day
November 25, 2010

Christmas Day (observed)
December 24, 2010

E-mini Futures Tick Sizes

2010-10-22T22:14:00.000-05:00

Tick Size is the minimum fluctuation on a futures contract. Rather than trade in penny increments like stocks, futures contracts trade in ticks. This value is denoted in various dollar amounts per contract. For euro futures a tick and pip is essentially the same thing.

E-mini S&P

• Ticker Symbol: ES

• Value of 1 Tick: $12.50

• Ticks per Point: 4

E-mini Dow

• Ticker Symbol: YM

• Value of 1 Tick: $5.00

• Ticks per Point: 1

E-mini NASDAQ

• Ticker Symbol: NQ

• Value of 1 Tick: $5.00

• Ticks per Point: 4

E-mini Russell

• Ticker Symbol: TF

• Value of 1 Tick: $10.00

• Ticks per Point: 10

E-mini Euro

• Ticker Symbol: 6E

• Value of 1 pip: $12.50

• Ticks per Point: n/a

An additional note, the S&P 500 aka. the “big” trades in $0.10 increments. Often times pit traders will buy contracts in the S&P pit @ a dime and using a headset flip them on the e-mini Globex exchange, this is known as big/mini arbitrage (arb).

Futures Contract Months Explained

2010-10-21T13:22:00.004-05:00

For those who trade or are interested in trading e-mini Futures, you may be wondering what the symbols mean (eg: /ESZ0). The four e-mini index futures are S&P (ES), Dow (YM), NASDAQ (NQ), and Russell (TF). The e-mini Euro Future contract is 6E.

All platforms have their own form, but the basic letters and contract months are the same. For the thinkorswim platform, simply typing /ES will pull up the front month e-mini S&P contract.

The second half of the symbol relates to the contract month or the year. Futures contracts every four months as follows, March (H), June (M), September (U), December (Z) followed by the year 2010, or in the case of thinkorswim, the last digit of the year (2010 = 0).

So as of October 21, 2010 the front month contracts on TOS are as follows…

E-mini S&P - ESZ0

E-mini Dow - YMZ0

E-mini Nasdaq - NQZ0

E-mini Russell - TFZ0

E-mini Euro - 6EZ0

Trading with the NYSE Tick

2010-10-20T10:23:00.003-05:00

Week 42 Analysis

2010-10-17T21:50:00.000-05:00

News for the week…

Earnings announcements for the week...

Market Theory

2010-10-14T13:50:00.006-05:00

• The market is simple, supply versus demand,
the balance of greed and fear is how price is determined

• The market is ALWAYS right

• Trade with the market momentum

• The market continually retraces

• Old support acts as new resistance & old resistance acts as new support

• Always sell what shows you a loss and keep what shows you a profit

• One trade won’t make you, but can surely break you

• There will ALWAYS be another trade

• The prepared trader has the greatest chance for success in the markets

• Everything needs to be accounted for once the trade is placed

• There is always more to be learned in the markets

• No one can predict market moves

• Fear your loss might turn into a bigger loss,
hope your profit may turn into a bigger profit

• Know thyself and thy personality

• Be patient with profits, quick with losses

• A man may beat a stock or certain commodity,
but no man can beat the stock market

What does NASDAQ stand for?

2010-10-12T10:47:00.001-05:00

Run by the National Association of Securities Dealers now acquired by the AMEX, the National Association of Security Dealers Automated Quotations (Nasdaq) began trading on February 9, 1971, as the world’s first electronic stock market. Today it is the largest electronic stock market with more than 3,000 companies listed.

The Nasdaq, National Association of Securities Dealers Automated Quotations has the largest trading volume than any other US exchange, trading approximately 1.8 billion shares per day. The exchange trades a variety of companies, but is most well known for being a high-tech exchange, trading many new, high growth and volatile stocks.

Because it is an electronic exchange, it has no physical trading floor, instead making all its trades through a computer and telecommunication systems. Rather than buying and selling from each other, brokers buy and sell through a market maker. A market maker is a person or firm who quotes both a buy and sell price for the stock underlying or commodity. The market maker is obligated to buy when there is an excess of sell orders and sell when here is an excess of buy orders. Their profits result on the turn, or the difference between the bid and ask, known as the spread.

Since there is no trading floor, the exchange built the Nasdaq MarketSite in New York’s Time Square thus giving it a physical presence. The tower’s large outdoor electronic display gives current financial information 24-hours a day.

The Nasdaq listing fees are significantly lower than those for the NYSE and contains lower listing requirements, allowing newer, smaller companies to become listed. The requirements are as follows.

• 400 stockholders owning at least 100 shares

• $1.1 million shares outstanding in the marketplace

• $1.0 million in operating income

• Initial market value of $8 million

The Nasdaq is a publicly owned company, trading its shares on its own exchange under the ticker symbol NDAQ.

Sources

Investopedia.com

ADVFN.com/StockExchanges

StockGuru.com

Week 41 Analysis

2010-10-11T20:12:00.000-05:00

News for the week…

Alcoa (AA) kicked off earnings season last Thursday so expect a moving market over the next few weeks. Nothing on the news docket for the first three days of the week so we are expecting a continuation of the current trend.

The VIX dropped significantly today breaking into the teens. As the saying goes, when the VIX is low lookout below. This also makes it a good time for option buyers as premiums decline. As always, we never like to be positioned 100% in one direction so adding some put positions as well as calls will dramatically help balance the portfolio through this earnings season.

As for intraday trading, we are seeing an incredibly technical market even on lower volume days. This great trading environment should remain until the holidays when things will slow down.

Week 40 Analysis

2010-10-03T21:37:00.001-05:00

News for the week…

Pending Home Sales to kick off this week’s news announcements should provide a great environment for intraday trading. What we will be watching for this week is a break and close outside of this past week’s consolidation.

Here are some things to keep in mind in your trading.

- More is better than less

- Sooner is better than later

- Always take a little bit less sooner

When you have a profit, you CANNOT, let that trade turn into a loser. Have everything in place before the trade is placed because once you are in the trade your objectivity becomes skewed.

Quants: The Alchemists of Wall Street (Movie)

2010-09-28T21:09:00.004-05:00

Week 37 Analysis

2010-09-12T20:56:00.003-05:00

Expect more participation and an much easier environment for intraday trading beginning this week.

So far this year we’ve gone nowhere. Now that we are out of the summer slowdown we are anticipating a trending market. If we break the neckline of the inverted head and shoulders then we would result to new highs, if we sell off at the neckline we will look for new lows on the year.

One thing to take note of is the VIX trading at lows. A sustainable rally could only ensue if the VIX breaks 20 and remains there.

Let the Games Resume

2010-09-08T21:18:00.000-05:00

The time has finally come for the big guns to resume trading after the summer holiday. Now is the time of year when the big hedge funds and top traders begin ramping up their position size. What does this mean for you and me or any other traders pushing around less than 100 lots on the ES, more participation, a more technical market, and more follow through.

Futures Trader: Tomorrow is rollover meaning the volume for the contract month will shift from the current expiration month September (U) to December (Z). Make sure to update your charts and execution platforms accordingly.

Options Trader: Since tomorrow is rollover this means next week is Options Ex. Any new positions should be taken in the months of October and later unless your strategy involves selling premium.

Stock Trader: More volume equals ease of entry and exit for those smaller less liquid stocks.

Our short term outlook is a move down to 1072 at which point we will either bounce and move higher, or sell off to new swing lows and potentially beyond. It’s time to ramp up the trading into the end of the year, so get ready for a wild ride.

Daily Reflection: 09.01

2010-09-01T15:17:00.001-05:00

For what was a very big move up today you may notice it was rather “slow.” This is known as a gap and go day where the market gaps up and then moves sideways the rest of the day. This keeps the majority of market participants out of the market. The only way to catch these moves if you have not positioned yourself in the pre-market or overnight sessions is to be long or short stock, option, or overnight futures positions. Find a balance between intraday and overnight setups that suits you.

Today we saw a close on the Trin of .25 and while this is bullish for the day, tomorrows actions will dictate the likelihood of a sustained rally, or decline. If we fail to sell off to some degree tomorrow and instead rally, then the markets are in for a longer term sustained rally. We have lots of news tomorrow including Jobless Claims, Pending Home Sales, Chain Store Sales, and Bernanke Speaking so expect a wild morning.

Wk35: Mkt Forecast

2010-08-29T20:49:00.000-05:00

Well spaced news for the upcoming week. We are anticipating a rally this week at least in to the 1082s on the /ES. If we move up and break 1093 then we will look to buy the first major pullback. The top traders and hedge fund managers should be coming back from holiday after Labor Day and the market action should really start to pick up again.

Daily Reflection: 08.23

2010-08-23T17:57:00.002-05:00

Well that rally was short lived. We were immediately sold into on the open at the daily short level of 1080 on the S&P. The target on this trade is 1053 and there’s no reason we can’t go there tomorrow on the Existing Home Sales report. Regardless, now is a great time to be hedged.

If you are flat, then a 70/30 bearish/bullish weight to your positions would set you up nicely to take advantage of a violent down more, or steady up move. The key here is to balance the portfolio in a way that you can sleep at night (if you are holding overnight positions) and allow you to think clearly throughout the trading day. If you are sweating over a position, chances are you are positioned to large.

Wk34: Mkt Forecast

2010-08-23T07:05:00.002-05:00

Lots of news this week beginning on Tuesday with Existing Home sales and ending with GDP will make for a nice week of trading. During times of rotation as we saw over the past two weeks the markets can be extremely whipsaw like and almost untradeable at times. It is perfectly okay to be on the sidelines during these times, patiently waiting for the next trade. Refer to our post on trading like a cheetah. We're Looking for a rally this week. If it is sold into, look for a big move lower. If we break prior swing highs, then the rally will continue.

Gone for the weekend

2010-08-12T19:04:00.000-05:00

Enjoy these videos for the time being...

Daily Reflection: 08.11

2010-08-11T20:21:00.003-05:00

Look out below! We have now clearly broken trend line support, where land nobody knows. Well, not quite. An inverted head and shoulders could potentially be setting up with the left shoulder trading in June, Head in July, and right shoulder forming in August. Regardless, the VIX has jumped back into the mid 20s and the sense of fear and uncertainty is back in the markets (if it ever left to begin with).

Daily Reflection: 08.10

2010-08-10T21:06:00.003-05:00

This week is going to get ugly so hang on. If you don’t already have it, grab yourself some downside protection expecting for the worse. As of late good news has lead to down moves in the market and bad news to up moves. Today’s Fed announcement was far from good news. The market is a forward looking instrument.

Daily Reflection: 08.09

2010-08-09T21:41:00.000-05:00

The FOMC Meeting Announcement tomorrow is likely to cause a whipsaw around 1:15 CST and the time leading up to it. No trading will take place tomorrow from 1:00 PM to 1:30 PM, at least on our end. No sense in getting chopped up or impulse trading any sort of news. It’s never worth it.

Daily Reflection: 08.06

2010-08-06T19:27:00.000-05:00

A slow week to say the least. Today’s Jobless Claims # added a little volatility to the markets, but overall we continue with the sideways action. We bounced off trend line support today and this candle will be used for the bullish/bearish line in the sand, bullish above, bearish below.

Daily Reflection: 08.05

2010-08-05T21:36:00.000-05:00

This week we have been trading within the value area each day resulting in complete chop. Looking at a daily it’s clear that we are in a period of consolidation. The more we move sideways after a gap the more likely we are to break in the direction of the gap once the consolidation is over. Therefore, we are looking for a resume to the trend and move higher.

Tomorrow’s Employment Situation is the big news at 7:30 CST so be ready for some volatility.

The day’s value area is defined as 70% of where volume took place during that day. Below is a value chart. More on this can be found here.

Daily Reflection: 08.04

2010-08-04T16:11:00.000-05:00

Two consolidation days after Monday's move up. Expect a reaction tomorrow. Also, keep an eye on the VIX as it has been drifting lower.

Live e-mini S&P Trade

2010-08-03T12:39:00.001-05:00

Daily Reflection: 08.02

2010-08-02T21:40:00.000-05:00

Given that we hit our 1122 target on the S&P. The next expected pullback level would be 1187, however since we traded back at a 50% level of 1085, we have another unfilled target at 1134. The longer term bullish line in the sand will be 1078, bullish above, bearish below.

Wk31: Market Forecast

2010-08-01T19:49:00.003-05:00

The S&P is at a great level to put on positions, both to the long and short side. It is not clear yet whether we have double topped, or if this is the stat of an uptrend. Both have developed, but neither has broken out to confirm its trend. In situations like this it’s best to start the week delta neutral and add/subtract positions as the week progresses.

Our unfilled targets on the S&P are still $1122.

News announcements for the week…

Live Futures Trading

2010-07-28T14:09:00.002-05:00

Here is an example of an e-mini S&P futures trade using Infinity Futures and Thinkorswim.

Daily Reflection: 07.27

2010-07-27T19:53:00.002-05:00

We saw nice breather for the markets today. The line in the sand for tomorrow will be the 1114 on the ES (e-mini S&P). If we move above this level we should have no problem making it to our 1122 target. A pullback would not be a bearish signal just yet and sideways action is considered bullish in this case.

Daily Reflection: 07.26

2010-07-26T20:41:00.001-05:00

A very technical day in the markets today. Expecting a great week for trading. Looking for that 1122 on the S&P this week. If we sell off from there we will look to get long again around 1086.

The VIX continues to fall and is about to breakdown out of a decending triangle. This is a pivotal level and we should see some strong moves in the market this week.

Infinity Futures Platform

2010-07-26T20:38:00.000-05:00

Checkout Infinity Futures for a cheaper alternative to the TT (Trading Technologies) and CQG trading platforms.

Wk29: Market Recap

2010-07-25T21:13:00.003-05:00

We have an inverted head and shoulders forming on the daily chart of the S&P. This week we broke out above the inverted hammer formed on a weekly bar during week 28. There has been more balanced environment of buyers and sellers, and the VIX remains in the low 20s. We are expecting this to continue, but remember that earnings announcements are still popping up all week long.

Wk30: Market Forecast

2010-07-25T21:12:00.000-05:00

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

Multiple indicators and price patterns signal higher on a broader timeframe. The inverted head and shoulders has a target of S&P 1200, with the daily ambush long shorter term target of 1122. There is a lot of economic news this week so we should have plenty of intraday setups.

Dailly Reflection: 07.22

2010-07-22T16:43:00.007-05:00

A Choppy week, but the bulls are winning the battle thus far. We will look to break highs of the week tomorrow on our way up to 1122.

Daily Reflection: 07.21

2010-07-21T19:57:00.000-05:00

Today’s bearishness was purely reactionary. Market orders after Bernanke spoke this afternoon sent the market lower, closing off roughly 14 S/P points. We didn’t even break yesterday’s lows. Yesterday the bulls took control in full force and today I feel it was simply some of the bulls jumping ship, rather than the bears taking over. If we break below Tuesday’s close then I can see us retesting lows and more than likely breaking yearly lows. Looking at the chart below, we could just as easily gap up tomorrow morning, sell off to today’s close (filling the gap) and rallying to new swing highs.

Daily Reflection: 07.20

2010-07-20T17:34:00.002-05:00

And just like that we are on our way up again. 1051’s traded today to the tick on the ES early this morning. We are now in a long with a target of 1122.

Daily Reflection: 07.19

2010-07-19T20:33:00.001-05:00

Looking for a move on the S&P to 1051.

The line in the sand for tomorrow, bullish above Monday’s highs on the S&P, bearish below, hence we will use a break ABOVE Monday’s high to cover shorts, and a break BELOW Monday’s low to cover any longs.

Wk28: Market Recap

2010-07-18T20:42:00.001-05:00

An Inverted hammer on the weekly top line figures, once again on stronger volume. The trend thus far this year has been lighter volume on the rallies as compared to the declines.

The general daily trend channel can be seen below. Chop between the upper and lower support and resistance level is possible, we’ve been seeing nice conditions for swing trade setups and great intraday trading.

Wk29: Market Forecast

2010-07-18T20:40:00.000-05:00

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

While economic news is light, we are in the thick of earnings season so expect wild price action and a lot of opening gaps. Remember, gaps tend to fill so fading the opening move is typically the first trade of the morning from an intraday perspective. We are expecting some sideways action, but will be watching out for a potential reversal forming a higher low. It is still possible to break lows on the year.

Daily Reflection: 07.15

2010-07-15T20:46:00.002-05:00

Tomorrow is Options Expiry. Expect some funky price action especcially during the first half hour. We are expecting resistance at the S&P 1110 level.

Daily Reflection: 07.12

2010-07-12T15:32:00.000-05:00

Welcome back. Last week posted the biggest gain in the markets this year. Volume however was extremely light. We are getting in to earnings season with Alcoa (AA) kicking things off tonight after the bell. Things could get choppy as we tend to gap at the open throughout big earnings announcements like GOOG, MSFT, CSCO, etc. Keep your eyes peeled.

4th of July Hiatus

2010-06-30T19:25:00.001-05:00

We will be taking some time off for the holiday festivities including a trip to the big easy. We will return on July 12th. In the mean time we're expecting fireworks in the market as 995 remains our target on the S&P.

Daily Reflection: 06.30

2010-06-30T19:19:00.002-05:00

Heavy volume on these last two down days. The market has shown it’s hand and we are on our way to the S&P 995 target.

Daily Reflection: 06.29

2010-06-29T17:53:00.000-05:00

Pump the breaks, looks like the market gave us the fake out. From a technical perspective signs were pointing to a bounce, however today’s price action put things back in check. Suddenly that 995 S&P Target doesn’t seem so far away. A few weeks back we talked about getting short at 1127; our target is the $995. We also talked about the importance of hedging. When the market is up, you must think about downside risk, and when the market is down, you must think about upside risk.

Daily Reflection: 06.28

2010-06-28T21:57:00.001-05:00

For what appears to be a choppy chart at the end of the day, intraday trading has been quite technical. Took profits on GLD this morning however, we still thing it will be moving higher. Once again we will pick up calls near the lows of the trend line. The Put/Call ratio is showing a move to the upside is near. The move down has begun to slow and round out. We are expecting to close the week positive across the top line figures.

Wk25: Market Recap

2010-06-27T21:41:00.003-05:00

We saw a stream of selling this past week; however volume did not jump up by that much. The chart is semi-broken and choppy looking. We will continue to go with what is working, buying pullbacks in strong up trending names like SNDK, NFLX, and GLD, hedging with the QQQQs, SPY, or DIA.

Wk26: Market Forecast

2010-06-27T21:41:00.000-05:00

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

The pattern we see forming is a Double Bottom Pullback. Keep in mind that the opposition to any pattern is a violent move ie: if a bullish pattern fails, a violent move to the downside tends to prevail because all the people that were getting long are forced to exit rapidly via market orders. Later this week volume will start to lighten up and next week we will not be trading as volume will be extremely thin.

Wk26: Watchlist

2010-06-27T21:35:00.002-05:00

Continue to buy pullbacks in GLD and like NFLX and SNDK as longs if they break their highs from Friday.

Daily Reflection: 06.24

2010-06-24T19:49:00.001-05:00

Continued weakness... If you have not hedged your longs, do it. This could get real ugly real fast. We are anticipating a break of 2010 lows.

Daily Reflection: 06.23

2010-06-23T16:04:00.001-05:00

Teetering on the edge of a violent move. A break above today's high or low should signal which way that move will take place.

Daily Reflection: 06.22

2010-06-22T19:40:00.000-05:00

Heavy selling and a Trin close above 2.0 on both the NYSE and NASDAQ. If we cannot close higher tomorrow we are in for new lows on the year, but as always there are two sides to every trade…

Bulls see: Pullback before making new highs (look at Feb 25, same setup).

Bears see: Head and Shoulders, looking to make new lows on the year.

Tomorrow is the monthly Fed meeting announcement. We are expecting them to leave rates unchanged until the November elections.

Daily Reflection: 06.21

2010-06-21T22:02:00.000-05:00

Looking to add to longs on a move above the high of the low day in this pullback. We still have unfilled gaps on the ES to the downside at 1085.50 and 1054.75 and to the upside at 1155.00 and 1198.75.

Wk25: Watchlist

2010-06-20T21:52:00.000-05:00

Watch for a break above the high of low bar on a pullback into a long, and a break of the low of high bar for a bounce into a short.

The below names should provide decent setups this week.

Bullish: AAPL GNW, GLD, HSY, RIG, SLB, UAUA

Bearish: BX, GS, QCOM, SYMC

Wk24: Market Recap

2010-06-20T20:58:00.001-05:00

The market, while bullish this week, is in the midst of a possible head and shoulders pattern on the weekly timeframe. We will be watching for a break below the low of the prior week’s bar on the move up to get short.

Wk25: Market Forecast

2010-06-20T20:56:00.001-05:00

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

The Fed will release their FOMC Minutes Wednesday so expect a volitale intraday session in the morning of 6/23. Friday’s GDP could send the market sailing up or down so we are positioning delta neutral early in the week.

We are trading at all the way halfway back from highs to lows. $1148 on the S&P is the line in the sand, bullish above cautiously bearish below.

Daily Reflection: 06.17

2010-06-17T18:20:00.001-05:00

The VIX (Volatility Index) has pulled back which brings up the idea that there could be some sustainability to this rally. We are expecting a bullish OPEX Friday and a selloff to the 20MA next week. This will provide a great opportunity to put on new positions, both long and short.

Took profits on some GLD, looking to grab more if it dips to $120.

Daily Reflection: 06.16

2010-06-16T21:18:00.000-05:00

If you're still buying June options, well, shame on you. Options Expiry is Friday and it is also a Quadruple Witching. Look for continued strength to end the week and a selloff next week.

Daily Reflection: 06.15

2010-06-15T17:49:00.000-05:00

Today we saw a close above the 20 Period Moving Average across the top line figures. This is something we have not seen since early May. We are bullish for the time being, however do see shorts setting up in the near future. Looking deeper into the leading industry groups we see things like Paper and Tires, rather than Banks and Biotech’s, thus are labeling this as a dead cat bounce until we break $1148 on the S&P.

Since GLD broke to the upside we dumped the put portion of the position, dumped our FXE puts at the open and added an ERTS short at the close. We continue to hold WLP and SNDK as well as a handful of the other names talked about in the weekly watchlist.

Daily Reflection: 06.14

2010-06-14T22:33:00.000-05:00

The S&P failed to close above its 20EMA which is the trend changing level we have been talking about. We touched the $1101.75 gap fill from 6/3 to the tick and it ended up being the high for the day. A break above the high of today and we are bullish, break below and we are bearish. A big move is on the way.

Wk23: Market Recap

2010-06-13T22:11:00.002-05:00

The weekly chart is extremely choppy. Doji’s and opposing tail hammers make for a difficult trading environment across all timeframes.

Wk24: Market Forecast

2010-06-13T22:10:00.000-05:00

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

A close above the 20-EMA would be extremely pivotal. We remain delta neutral until this happens and still have our downside target on the S&P of $1005. Only if we break above $122 will we see this target not being reached.

Wk24: Watchlist

2010-06-13T22:06:00.000-05:00

Calls:

WLP strike: 50c

SNDK 41c

SLW 18c

Puts:

FXE strike: 123p

DNDN 42p

GLD strangle or straddle options

116c/124p or 120c/120p

Watchlist Recap: Our stocks over the last few weeks have done quite well, all selling for a profit…
Longs: AKAM, CIT, DTV, NEM, SNDK
Shorts: JCP, GRMN

Daily Reflection: 06.10

2010-06-10T20:23:00.000-05:00

We’re not out of the woods just yet. It’s not that we’re permabears here at TJMacTrading, simply remaining objective. We traded average volume on today’s advance, with the VIX down just slightly. The put/call ratio remains over 1.0, and has for some time, never breaking the .90 mark as of late. We have two scenarios from this level that will pan out next week.

Scenario 1: Shot covering rally to retest S&P $1105.

Scenario 2: We rollover from these levels and make new yearly lows at $1005.

100 points apart, only the markets will tell us, whichever scenario occurs, we will be participants.

Creating Your Trading Business

2010-06-10T09:52:00.000-05:00

Daily Reflection: 06.09

2010-06-09T17:54:00.002-05:00

New lows on the year here we come. S&P 1005 is our target since the bulls have failed to hold this market up. With futures rollover tomorrow intraday trading may continue to be choppy. Nonetheless we did see a great long entry last night right up to our 1074 short on the /ES. We haven’t added any new swing trade positions at this time.

Daily Reflection: 06.08

2010-06-08T19:17:00.001-05:00

A short hiatus, but we're back. Looking at a chart of the SPY, we produced a nice little double bottom with stronger volume. To keep it short and sweet, we are looking for a bounce up to 1075 on the S&P500 and then a decline down to our original target $1005.

LVS and UAUA are setting up as nice longs this week. Next week is options expiry so we are looking to July for options. LVS 21 call, and UAUA 19 call.

Reminiscences of a Stock Operator

2010-06-05T00:11:00.000-05:00

Ask any successful trader and they will tell you that the best book out there relating to trading is Reminiscences of a Stock Operator by Edwin Lefevre. This is the story of famed trader Jesse Livermore, discuised in the book as Edwin Lefevre. This incredible story is a very easy read and should be read over and over again.

Daily Reflection: 06.04

2010-06-04T18:39:00.000-05:00

S&P Target: $1005. Stay tuned for a full market wrap Sunday.

FLOORED

2010-06-03T21:07:00.000-05:00

For those who missed the movie FLOORED, here is a private link.

Daily Reflectino: 06.02

2010-06-02T22:19:00.000-05:00

It looks as though the markets are thinking higher. Don't be fooled, even if we do get a short rally we are not clear to retest April highs until we break $1150. Lots of news tomorrow should spark things up a bit and make for some great intraday trading.

Daily Reflection: 06.01

2010-06-01T22:02:00.001-05:00

Not a pretty NASDAQ chart for bulls. With daily swing targets below us, an inverted hammer on the QQQQ’s and continuing fears of the Oil Spill, Greece and Spain, and not to mention our own US debt we could see a massive decline this week breaking lows. A break outside of this inverted hammer on the QQQQ’s should give us some short term direction.

New shorts setting up for tomorrow: AMED, M, SLW, UNP

Wk21: Market Recap

2010-05-31T16:40:00.000-05:00

“Sell in May and go away” holds true for investors once more as heavy selling continued last week, the biggest monthly loss since February of 2009. Volume was well above average on this past months selling and with all the news overseas, investors are shaken.

Why do we care about the “investors” if we are short term traders? Investors are the ones that move the market on a month to month basis, while certain day trading and high frequency firms have the power to move the markets intraday, the longer term trend is established by the longer timeframe investor.

As short term traders, the first thing we want to do when starting a new day, week, or month, is to identify what trend we are currently in on the longer timeframes and work our way down to the timeframe in which we trade.

Wk22: Market Forecast

2010-05-31T16:39:00.001-05:00

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

This week is sure to shed some light on the next longer term move. If we continue to sell off, massive panic could ensue, however I do not believe this will be the case. It would make sense that we see 1125 on the S&P, at least before we see 1040 again. This would be a great opportunity to add some swing shorts and take profits on longs. Below are the pivot levels for the week and month.

Our line in the sand for the week will be $1122 bullish above, bearish below, meaning if we break above this level, we will look to double top on the S&P, if we come up to 1122 and fall back down we will look to a target of $1005 on the S&P, yikes.

Wk22: Watchlist

2010-05-31T16:36:00.000-05:00

These are some of the stocks we’re long and short going into this week. We will follow up in the week with some additional names to establish new positions in.

Bullish: AKAM, CIT, DTV, DNDN, NEM, SNDK

Bearish: DIA, GRMN, PBR

Daily Reflection: 05.27

2010-05-27T22:35:00.001-05:00

Let's not load the boat long just yet. Grabbing a few shorts as we inch higher is a smart play as we continue to see lighter volume on the rallies. Tomorrow we should see some decent trading in the morning then a very slow afternoon session as trader's head out early for a 3-day weekend.

Wk21: Watchlist

2010-05-25T23:00:00.001-05:00

Longs: ABX, GG, NEM (Same sector), AKAM, DTV, CMG, DAL, SNDK, NFLX, VCI

Shorts: GRMN, LEN

Daily Reflection: 05.25

2010-05-25T15:52:00.003-05:00

Have we hit a bottom? Today’s price action sure seems like it. We opened the day at -140:1 breadth and closed at 1:1 grinding higher all day. The market is heavily extended to the downside and has held support at the 2010 lows. When we see a daily hammer candle pattern (on the SPX) as large we’ve seen today, it is common for us to gap higher the following day. If this does occur, we will be looking to add to long positions and enter new positions at a pullback to tomorrow’s gap fill of 1073 on the ES.

Daily Reflection: 05.24

2010-05-24T22:49:00.000-05:00

With a VIX near the 40s, we are expecting a lot of volatility this week. A lot of news announcements can act as catalysts, not to mention the situation with the EU. We remain delta neutral.

Wk21: Market Forecast

2010-05-23T21:53:00.001-05:00

Many good nuggets of information can be found in this weeks daily reflection posts. This week we are expecting some sort of bounce. News announcements can be found here and include GDP on Thursday. Volatility remains high so be prepared form continued large intraday swings. We are expecting volatility to remain high through the summer. Volume remains higher on the down weeks and lighter on the up weeks.

Daily Reflection: 05.20

2010-05-20T19:58:00.001-05:00

First the scare, then the tear. Last Thursday’s price action was essentially mimicked today only with less violence. Below is an excel spreadsheet I use to record the market internals. The important columns to note are the Trin and the NYSE % change. The light orange dot represents a bearish Trin close on the day, the following day we had a bullish Trin close, but a bearish market. This is an extreme warning signal. When we see Trin readings above 2.0 and fail to rally the next day we are headed for an extreme slide which happened the following day (see red dot).

Where to go from here? We continue to stress the important of remaining delta neutral or at least hedged if you are delta long. We will be looking to add shorts/puts on any bounce.

Daily Reflection: 05.19

2010-05-19T21:25:00.001-05:00

A choppy day today, but again nice size intraday swings on the /ES. The 6E was a nightmare to trade and we will be treadding lightly for the remainder of the week. We have three scenarios for tomorrow.

1. If we move up to $1123 and and sell off, we will have a downside target of $1088.

2. If we move up to $1123 and continue up through $1129 will have a bullish target of $1203.

3. If we open and do NOT trade up to $1123, but sell off from the open breaking our 1098.75 lows, then we will trade back down at $1056.