20190823
Long 1 YM 26134, -7
Short 1 ES 2908.0, -1.5
Short 1 RTY 1498.0, -1.5
Short 2 RTY 1503.9, 1503.8, +2.5, +2.4
Short 2 YM 26252, 26255, +20, +31
Short 1 NQ 7698.25, -1.25
Short 1 NQ 7704.0, -2.25
Short 1 NQ 7708.5, -2.25
Short 2 NQ 7717.5, -2.25, -2.25
Short 3 NQ 7723.0, 7723.0, 7723.0, -1.5, -1.5, -1.5
Short 3 YM 26300, 25300, 26300, +20, +30, +30
Short 1 RTY 1508.0, +3.7
Long 1 NQ 7600.0, -2.25
Long 1 RTY 1481.5, +4.6
Long 1 NQ 7542.0, -0.25
Total ES -1.5
Total YM +124
Total NQ -17.5
Total RTY +11.7
Many years ago, while I was a contractor making trade calls for a room of futures and stock traders, I heard the assertion, absurd though it was, that Alan Greenspan was timing his pronouncements and rate decisions with Elliott Wave patterns of the daily time frame. Of course, the person making this assertion was an Elliott Wave enthusiast, and following the pattern labels very precisely. He was not considering how absurd the notion was that Alan Greenspan would be doing the same. But his observation of the apparent coincidence of the timing had a merit he did not understand.
Today, at 10:am ET, Fed Chairman Powell gave a much anticipated and closely watched speech on U.S. economics and the Fed's short term schedule for rate adjustment. How could anything in technical analysis be of use during such an emotional injection into markets! Then, things really got heated. President Trump tweeted out a counter punch to China's tariff announcement, a counter punch in itself. How could a trader possibly position to anticipate such a thing? And yet, using a fractal algorithm I uncovered more than 10 years ago to replace the clunky and over-constraining Elliott Wave, called Serial Sequent, I was able to position a short in the RTY contract just minutes before his tweet came out. Was Pres Trump, like Alan Greenspan, using a fractal algorithm from the market place to time his bearish tweets on China? Absurd. No one can predict Donald Trump. That's part of both his charm and his tremendous success.
Alan Greenspan didn't use Elliot Wave. Markets simply overwhelm and swallow any emotional fuel injected into them. My position didn't predict Donald Trump's tweet, even though Serial Sequent put me in a short just ticks below the end of that rally, and the high of the day. The market was simply poised to retreat, regardless. And had I known the context of that tweet as it was coming out, I would have pulled any target I had on that short and captured a lot more of the ensuing 26 point RTY decline than the meager +3.7 points that I did... And likewise, using the same Serial Sequent algorithm, I managed to capture profits right in the midst of Fed Chairman Powell's speech, even though I had little clue what he was really saying. I simply waited til the pre-delivered version of his speech hit the wires and the internet so that it was theoretically out of the way, and traded the outcome of the fractal algorithm as it unfolded. This algorithm is not greater than the emotional context these events insert into price structure, it's that price structure has an underlying DNA to its structure, and regardless how much energy is being injected into the auction arena, price still carves out its thrusts and retreats according to this DNA code.
....and a good weekend to all...
