Monday, October 28, 2013

ES Pre Market Thoughts Tuesday

 
Circled in blue are areas that could possibly shock the bulls on a gap down and get early selling. Otherwise staying long

 ES PRE MARKET THOUGHTS
This a sample of how I do my market preparation. The night before I form a hypothesis of how I will approach the day if the market gaps up or gaps down. Preparing the night before takes out all the emotion and once I see the morning gaps I then refer to my plan for the day. 

White Lines show the Price Levels I will be paying attention to tomorrow along with the Highs and lows of the day and pivots:
  • 1754.50
  • 1742.25
  • 1734.50
  • Channel as marked above
Trend and Trades I May Consider

Trend: Staying Long unless there is a nasty down gap below yesterdays lows on the ES and the low of 2 days ago on the YM and NQ.

Gap Fill or Gap and Go: Will look for Gap Fills on an up gap below the R1 pivot or above yesterdays lows using support. If the Index's gap solidly over the R1 pivot (which I would then consider support) I will consider running with the index long at the open. If the 3 index's have a bearish gap down, under yesterdays lows (or the low of 2 days ago on the YM and NQ) will look to short  and go with the gap with an eye on support levels. 

Long: looking for false breakdowns off support levels to get long.Will consider a BO if there is a strong gap and the R1 is support and all 3 indexes in a agreement. Will stay away from a BO on a gap down unless there is a strong hammer off support pointing to a gap fill. Otherwise staying with fading long off support....unless a bearish gap down that is running hard to the downside. Staying away from run away trains. 

Short: No Fades short unless a modest up gap and R1 is resistance for all 3 indexes. A bearish gap down may consider fades the gap fill area as long as there is not strong bounce off support. If a nasty gap down surprising the Bulls then may consider Breakdowns but aware of support areas.

* You don't have to trade everyday. If the conditions don't feel right or if you're unsure of the current days trading environment then PASS on the trade. Missed money is better than lost money.  Day trading and the stock market is not a "war" that you must win at all cost. Trading should be fun, wait for only the good setups. Follow your rules, stick to your stops, and know that everyday the market presents a new chess board.





 

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