Thursday, November 7, 2013

ES Pre Market Thoughts Friday

ES and NQ 1 Hour Chart last 3 weeks
 
ES Daily...UGLY..prelude to things to come?
 
 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:
  • 1762.50
  • 1742.50
  • 1729
Day Trading Pre Market Thoughts

Trend Thoughts: Daily bar was a Wide Range Down bar on high volume with a strong close below the 10SMA that breaks the up trend. Could see a bounce up but will start to look for more shorts at resistance. This market will not head straight down but today could of been the signal. Yesterday the DOW and its 30 stocks hit an all time while the NQ and ES were weak. Media only reported on the DOW and its All-time high. Anyone who jumped on today was smashed.

Trading Day of the Month: Day 6

Special Day or Thoughts: Could be a tricky day. Will have to read markets before reacting and look the components of the index before making a trade.If not sure pass

Gap Fill Thoughts:  Up Gap: after a day like today bears could look to cash in on a gap up. Leary of a gap fill unless its weak at resistance. Anything below the low of 2 days ago or the PP pivot I would consider for a gap fill  Down Gap: If price is above the S1 pivot  will consider the long at the open. Will be checking premarket for support. Notes: flat open I may consider a short to test yesterday's lows...Gap fill could be tricky today after the large move yesterday. Reduce contracts or pass is an option.

Gap and Go Thoughts: Up Gap: If the Index's gap solidly over the low of 2 days ago (which I would then consider support) I will consider running with the index long at the open. With the NQ a gap over the PP pivot. Down Gap: NO, after today's run will pass  Notes: none

Breakout thoughts for a 15, 30 or 60 minute breakout: Would need all three index's in agreement to attempt a BO. If there is some strength will consider as the bears had a nice pay day yesterday and will look to cover at some point. A gap up that doesn't fill will consider breakouts. Notes: none

Breakdown thoughts for a 15, 30 or 60 minute breakdown: Will consider with a weak gap up or gap down that has filled the gap without a solid bounce off support. Will only consider if all 3 indexes are weak and room to run to a support level. Will not look for breakdown's if the markets come off support with volume. Notes: none

Fade Long thoughts: Best bet is a gap down at the open and run to support. Will  then look for a false breakdown. A strong gap up that holds may consider false breakdowns at support. Always want to go long with the indexes at support and monitoring the components of the indexes to see if they are in agreement. Notes: none

Fade Short thoughts:  If the markets are coming off support with volume will stay away. If the indexes are trading weakly into resistance I may consider. Will depend on how the market are reacting. A gap down and a strong bounce off support will not fade. Always want to short with the indexes at resistance and monitoring the components of the indexes to see if they are in agreement. Notes:

* 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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I DO NOT MAKE RECOMMENDATIONS TO BUY OR SELL SECURITIES - I JUST POST TRADES I MAKE OR FIT THE RULES OF MY TRADING PLAN ON A DAILY BASIS. DO YOUR OWN DUE DILIGENCE - YOU ARE RESPONSIBLE FOR YOUR TRADES, INVESTMENTS, AND DECISIONS! ALL CHARTS COURTESY OF TRADESTATION, SCHWAb & TD AMERITRADE