Aug 3 2011, Return-to-Breakpoint

Whether yesterday's breakdown from previous lows behaves like a neckline from here forward, or just a lower low in some larger flag pattern remains to be seen. Today's reversal bar does not actually tell the outcome yet. It is quite common after a breakdown to revisit the break point from which it started. Thus, the E-mini Russell today returned to that breakdown point from yesterday's late PM collapse, but could go no further. That provided two entries in today's trading. An intraday futures short at the breakdown price of 772.0, with 3 points in profit taken, and a swing short in the Russell Index 3x ETF, TNA, at 65.95. Late trading threatened a stop just above that price, but did not quite reach it. Many such 1-day reversals in bear markets produce nothing, and are, in fact, the best place to take a short position. If this one has follow-through, however, a stp-loss order that works in the overnight market will take the position out. Other trades today as below....
Trade Summary
Long 1 TF 762,7, -0.3
Long 1 TF 761.9, +2.0
Long 1 TF 760.0, -1.0
Long 1 TF 756.6, -0.5
Long 1 TF 755.3, +3.5
Short 1 TF 753.4, -0.4
Short 1 TF 759.0, -0.5
Short 1 TF 764.9, +2.0
Short 1 TF 772.0, +3.0
Short 1/3 size TNA 65.95: swing target
Total TF +7.8

Trade Summary Jul 28, 2011

Short 2 NQ 2370.75, 2372.5, +0.5, +4.0
Short 1 TF 801.2, +1.1
Short 2 TF 803.1, 803.9, -0.2 -1.0
Short 3 TF 804.2 804.2, 804.1, -0, +0.9, +0.6
Short 2 NQ 2379.25, +2.5, +4.0
Long 1 TF 802.1, +1.0
Short 1 TF 804.8, -0.3
Long 1 TF 801.5, +2.0
Total NQ +11.00
Total TF +4.1

Tue, Jul 19, 2011

Short 1 ES 1313.0, -1.25
Short 1 TF 826.0, +1.0
Long 1 YM 12446, -0
Short 2 NQ 2382.5, 2383.5, -0, -1.0
Short 2 TF 827.5, 823.3, -0.1, -0.3
Long 1 TF 826.5, -0.6
Long 1 TF 826.1, -0.6
Long 1 TF 825.3, +1.1
Long 1 TF 823.1, +0.7
Short 1 TF 830.7, -0.4
Short 1 TF 831.7, -0.6
Short 3 TF 832.4, 832.9, 932.6, -0, +.6, +.9
Total ES -1.25
Total YM -0
Total NQ -1.0
Total TF +1.7
Many traders participate in what's commonly referred to as the 'Gap Close' play. That is, they expect when the market gaps up or down to fade that action anticipating price to return to the previous day's Close. There are many triggers for this trade, but most entries come with price reversal after 5 or 10 minutes have elapsed. Using futures instead of stocks, I find the 'Gap Close' trade inconsistent at best. Instead, I look for a full structured move in the wave patterns that appear with data starting at 9:30am, regardless of whether it trades
back in the direction of the gap, or trades with that gap direction. Serial Sequent is a wave analysis method unlike that of Elliott Wave, and is the single most accurate way to determine potential reversals I've ever encountered.

Mon, Jul 18, 2011

Long 2 TF 818.2, 817.7 -1.0, -0.0
Long 1 NQ 2338.5, -2.5
Long 2 TF 813.9, 813.8, +1.0, -1.0
Long 1 TF 812.9, -0.6
Long 1 TF 812.8, +1.9
Long 1 TF 811.6, -0.5
Short 1 TF 814.0, +2.0
Long 1 TF 809.5, -.1
Long 1 TF 808.8, +1.8
Short 2 TF 813.1, 812.7, -1.0, -1.0
Short 2 TF 814.7, 814.7, +1.0, +1.2
Short 1 TF 813.0, -0.6
Total NQ -2.5
Total TF +4.1
Maybe it's the crisp way the market tends to bounce off support / resistance numbers, and the way reversals come more sharply, but in general my trading
results tend to be far better in the 1st frame of the day from 9:30am to about 11:15am, than at any other time later in the day. I generally don't trade in
the midday session at all. The last frame, from the 2:30pm Transition Time until the close can produce results similar to the AM frame, but often does no better than the midday.

Wed, Jul 13, 2011

Long 1 TF 835.1, +1.0
Short 1 TF 839.0, -0.8
Short 1 TF 840.7, +1.0
Long 2 TF 834.0, 833.6, -0.7, -0.3
Short 1 TF 833.3, +1.0
Long 1 TF 831.3, -1.0
Long 3 TF 830.7, 830.7, 803.9, +1.2, +1.2, +0.6
Total TF +3.2

Monday Jun 27 2011

Short 1 TF 769.9, -0.4
Short 2 TF 797.9, -0.5, -0.5
Short 3 TF 800.3, 800.4, 800.9, +0.1, -1.1, -0.7
Short 2 TF 802.0, 802.0, +1.5, +1.5
Long 1 TF 798.8, -0.5
Total TF -0.6

Trade Summary
Long 2 YM 11938, 11939, 11939, -5, -5, -5
Long 2 TF 794.4, 794.4, +0.7, -0.8
Long 2 TF 793.1, 793.1, +1.0, -0.0
Long 1 TF 793.3, +3.0
Long 1 TF 794.2, -0.4
Long 1 TF 793.4, +3.0
Long 1 TF 794.2, -0.6
Total YM -15
Total TF +5.9

Weekly Summary
Jan 20-24 2011
Total YM -15
Total TF +16.1

Sometimes the Day Model of one day is predictive of that of the next. Yesterday's deep gap down opening was characterized by the obvious TF relative strength. Today that action was mimic'd, at least initially. Ergo, buying against the lows and exiting into the bounces was the strategy again today. And although the TF relative strength failed to produce the same kind of recovery reversal, the strategy worked initially with handsome bounces and decent profits anyway.

Trade Summary
Long 1 TF 779.3, +2.3
Short 1 TF 785.9, -1.0
Short 1 TF 787.1, -1.1
Long 2 TF 784.0, 784.0, +1.5, +3.5
Long 1 TF 782.1, -0
Total TF +5.2

Divergence is a powerful tool. The two best trades today,both longs, came with strong divergence signals. The first was just a few ticks from the LOD in the TF contract in early selling. The YM and ES both were busy making full structured moves. But the TF, often the smarter, checked up and held just above its low established along side the YM and ES two waves earlier. Add some big size bids showing in TF at that level, and the buy was the proverbial silver platter. The second buy came later, on a pullback, after the big initial recovery rally from those lows. Just at the moment of perceived opportunity, around 10:28am ET, the YM again made a new LOD, this time solo, while the TF spiked down into a bit of a vacuum. It bounded back up nearly four points in just a few minutes.

Wed, Jun 22 2011, FOMC day

Trade Summary
Short 2 TF 802.1, 802.1, +1.2, +1.2
Short 1 TF 802.7, -0.8
Total TF +1.6

The previous format for FOMC was maximum anticipation and
immediate release, when the rate adjustments were scheduled
for 2:15pm. The 12:30pm release throws a bit of water
on that, as it seems to be more of a non-event now. And it
is further muddied by an endless drone on by Fed Chief Bernanke,
who comes on with a press conference at 2:15pm, where instead
of an immediate burst of energy, prices vacillate to the tune
of his remarks. Take me back to the previous format, please.

Tuesday, Jun 21, 2011 Persistent Trend Day Model

Trade Summary
Short 1 TF 793.2, -1.4
Short 4 TF 795.5, 795.5, 796.2, 796.7, -1.6, -1.6, -0.9, -0.4
Short 2 TF 798.9, 798.8, +1.3, +1.2
Short 2 TF 799.6, +1.0, +1.0
Long 1 TF 798.6, -0.4
Short 1 TF 799.8, -0.3
Short 1 TF 801.2, +1.0
Short 2 TF 801.9, 801.8, +1.2, +2.0
Total +2.1
There are few day models harder trade in than the Persistent Trend Day. We all recognize it when we see it, but not usually until it is well into its trend. Then the feeling that it's just too late to participate overwhelms, and we are left with counter trend trade entries, often leading to frustrating stp-outs. The best entry--and often the only one all day, often comes midday as price drifts back to important resistance. Once hit, action recovers the trend and proceeds onto new price extremes. Today's was classic. And although I managed to counter trend trade into a small profit, I'm not proud of it. And as for that one good opportunity to get in sync on a midday pullback? ....I was away from the screen, having wore myself out trying to stay afloat with counter-trend trades all morning.

Monday, Jun 20, 2011

Trade Summary
Short 3 TF 782.0, 782, 783.2, -0.3, -0.3, +1.1
Long 2 TF 778.3, 778.4 777.6, +0.5, +0.5, -0
Short 2 TF 782.8, 782.2, +0.8, +1.2
Long 2 TF 784.5, 784.2, -1.0, -0.5
Long 1 TF 783.3, -0.7
Total TF +1.3

Wednesday, Jun 15, 2011

Trade Summary
Short 2 TF 785.5, 786.2, +0.2, +1.0
Long 2 TF 785.6, 785.3, +0.2, +2.2
Long 2 TF 773.3, 773.3, +1.0, +2.0
Total +6.6

Tue, Jun 14, 2011

Trade Summary
Short 1 TF 782.5, -0.3
Short 1 TF 783.9, 784.1, -0.3, -0.5
Short 1 TF 785.4, -0.2
Short 2 TF 786.3, 786.4, +0.7, -0.5
Short 1 NQ 2247.25, -0.75
Short 2 TF 790.4, 790.4, +0.7, +1.7
Short 1 TF 791.5, +1.0
Long 2 TF 790.1, 790.0, +0.7, +1.0
Total NQ -0.75
Total TF +4.0