Tuesday, May 21, 2013

Stay with the trend

Not much to report except that the last 2 days have been a good "go with the trend" days. I've pretty much only traded bonds, and have gone with the ATR trend on all trades. Has been really clean.

Here's an example of how staying with the ATR would've kept one on the right side of this rally in equities.

In the ES chart below, one would've got long on the ATR trend flipping long at 1628ish, and the long trade is still on... 40 pts later!!

Saturday, May 18, 2013

Support levels continue to rise

More new highs across the board. Eventually, we'll get tired of hearing "new highs, new highs". For now, the trend continues. Support levels continue to rise across all the indices, and on NQ, 3020 has become the new support level. Updated chart with key levels to the downside.

Nice sell off in the bonds again on Friday, I was on the right side for some of it, thanks to Debrink from debrink.blogspot.com.  Updated levels on it.

Finally, TF levels, since this has been one of my favorite instruments to trade lately.

Wednesday, May 15, 2013

Listen to no one

One important thing about trading, is that everyone has his own perspective on whats happening. The market is colored by people's perception, and no one knows the complete picture, and making money in this situation is definitely not easy. The WORST thing you can do, is to try and mimic someone else's trade. Everyone trades different, so if you're copying someone, who has a different time frame, different account size, different risk parameters than you do, you're a FOOL.

Remember this lesson - Listen to no one, no one is an "expert". Learn how to trade, come up with a list of setups, and stick to them and in the long run you will make money. If you get greedy, try to swing for the fence, ignore risk parameters, then you will LOSE. You will lose in the long run, even if you made money on the trade.  This is because the key principle to make money is to understand yourself, the markets you trade, the setups, and manage risk. By listening to another, you're ignoring and over-riding ALL of these. Never ever do that.

Peace out. 

Tuesday, May 14, 2013

Madness continues

Havent blogged much because there isnt really much to say about this one way market. I'm clearly not very good at just being a dumb "with the trend" long here, so I've been attempting shorts and getting stopped. Awesome. NOT.

Things are getting pretty ridiculous though, look at the NDX again. ADX(7) > 60, but it appears to have broken above the trendline resistance? Or is it an offshoot?

ES has multiple support levels underneath, 1632, 1620-21, 1616, 1607 and 1593-95 are key support levels.

Bonds are getting massively dumped after the "end of QE3" announcement. I have 143 and 142 '20 as really major support levels here, but I dont expect them to be tested. If sanity holds tomorrow, expecting a move back above 144, and I'm looking to try longs against that area. Lets see. If I have learnt anything out of the last few weeks, it is to be a dumb trader and go with the trend. 

Friday, May 10, 2013

Weekend Charts

Will be posting various charts here, looking forward to next week. One chart I've been keeping an eye on is the NDX chart, and its pretty much peaking here around 2990, the key area I pointed out earlier this week.

Bonds are selling off because of the Hilsenrath article, and ES has gapped down this evening as well, but until 1620 is convincingly taken out, long side trades still provide better opportunities.

Levels on ZB to be aware of ,144 is a big level, and if we test it and hold it tomorrow, I'll be looking for longs. Under it, short it with stops above 144.

Stop loss wisdom from Thomas Bulowski

Thomas Bulowski from the thepatternsite.com posted this on his Facebook - good stuff. 

Stops can work wonders for quick trades that go wrong. I don't use them for buy and hold and position trades. But I DO use them for swing trades and mental stops for day trades. With this trade, I don't want to sell if the general market is taking my stock down and the industry and stock fundamentals haven't changed. In other words if all else is equal, a declining market trend will take a stock down with it. Why sell? You should sell if that market current turns into a bear market. Then hold onto long-term positions is dangerous to your wealth. Otherwise, it becomes a question of how low will the stock go and can you tolerate such a loss? Often you'll find that when you sell, about 2 weeks later, the stock bottoms and climbs. If the industry or stock internals (fundamentals) change, then holding can be a disaster. You have to evaluate each situation, do your research, and make the call. No easy answers.

Thursday, May 9, 2013

Markets are fucked up

No other way to describe it, markets are really messed up at the moment, with all kinds of corelations broken. One thing however seems to be still valid, and thats ES closely mirroring USDJPY. If this breaks, the markets should BLOW UP.

Wednesday, May 8, 2013

These days go on forever

SPX moar highs. Unbelievable! Closing $TICK reading was above 1100, so I thought its interesting to look back at prior instances when that happened.

Cobramarketview also has a chart for this - in my opinion, this is an exhaustive TICK and tomorrow and day after will close negative.

On another note, I added my twitter feed to the right of the blog :-) 

Tuesday, May 7, 2013

SPX weekly

Since I'm not trading this week, I can do stuff like look at weekly charts :-) Here's a look at SPX and the clear RSI divergence that has setup. All previous setups resulted in major selloffs, so I see a similar one setting up for SPX in the coming days and weeks.

The RSI divergence on IWM looks even more ridiculous, so buying is clearly weaker here, and this stuff has to matter, sooner rather than later.

AAPL hit resistance and rolled, so I'm guessing NQ starts this selloff? Overbought NYMO, etc and the complacency in the markets is also getting ridiculous now.

Monday, May 6, 2013

Back from vacation

I apologize for the lack of posts over the last week or so, I've been busy with work. Also kind of distracted and a little bored with trading. I took a vacation and visited Lake Tahoe this last weekend. Its a really beautiful place, and I'd highly recommend a visit if you haven't visited this place.

Now for a look at the NDX chart. This is a weekly chart, and price appears to have a little higher to go? Who knows. We might rollover from here. But with the amount of bullishness around however, it will take a few "BTFD" rallies before any real damage happens.

On a final note, I'm back but I plan to continue taking a break from trading. Feel like I need to spend some time on focusing on other things in life at the moment which I value equally - work, my woman and the weights at the gym. 

Thursday, May 2, 2013

ZB support levels

Well, the "breakdown" yesterday worked out gangbusters...NOT! Market rebounded huge today. However, key things to note are that while IWM sold off on 140 million shares or so, its rebound today was on less than 40 million. That kind of high volume selling, and a lower volume rebound, has to be a sell side setup, right? Lets see how it goes.

Anyway, putting up a chart here of ZB. Looks like it has support at 149 '05 and 149 '02, and we have some bearish odds overnight because of a gap up + end up day today.

Wednesday, May 1, 2013

Megaphone breakdown

Chris says we have a megaphone type breakdown in ES, so I tried to recreate it like he lays it out in his newsletter. Entry is basically a break of the previous days bar.

ES looks like its setting up a bear flag on the hourly. First level down is 1571, which is in my opinion is key support and bears need to break through that before making any real progress.  1557 is the next main downside target that I have, which I think we might hit this week.