Tuesday, November 5, 2013

ES Pre Market Thoughts Wednesday

ES 5 day 30 minute Chart                       NQ 10 day 30 minute Chart

 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:
    • 1764
    • 1750
    • 1747
    • 1742.50
    Day Trading Pre Market Thoughts

    Trend Thoughts: Staying Long unless there is a nasty down gap below the  low of 2 days ago. Will  not consider a trend change until a solid close below the 10sma on the daily charts which is a close below today's lows. Market showed again today the trend is up, short at your own risk or at specific high % areas.

    Trading Day of the Month: Day 4

    Special Day or Thoughts: ES and YM daily charts show False Up days. ES and NQ still in Chanel.

    Gap Fill Thoughts:  Up Gap: If price is below the R1 Pivot (high end of the channel) and at resistance will consider the short....which is the high end of the channel. With an Up gap I would lean towards the ES or YM for a gap fill. Down Gap: If price is above the low and has solid support will consider the long at the open. Notes: don't like a NQ up gap over its high

    Gap and Go Thoughts: Up Gap: If the Index's gap solidly over their channels (which I would then consider support) I will consider running with the index long at the open. Down Gap: If the 3 index's have a bearish gap down, under yesterdays lows, will look to short and go with the gap with an eye on support levels. With the ES want to get below the low of 2 days ago. Notes: none

    Breakout thoughts for a 15, 30 or 60 minute breakout: Dont like much with a BO trade unless strong gap over the channel surprising the bears or much like today a hard bounce off support with volume. Would need all three index's in agreement to attempt a BO. Notes: none

    Breakdown thoughts for a 15, 30 or 60 minute breakdown: With the trend up I usually stay away from breakdowns but the market is starting to lose steam. Will consider if there is a weak gap either way, trading below the gap fill. ES has room to run to yesterdays lows, NQ would be more of a bumpy ride. Would have to be a nice setup among the 3 indexes where their is room to run to support .Notes: none

    Fade Long thoughts: In staying with the trend looking for fades off support (false breakdowns) off the low of yesterday, low of 2 days ago, gap fills or possible lunch time fades on a double bottom. Minimum 30 minute wait.  Always want to go long with the indexes at support and monitoring the components of the indexes to see if they are in agreement.

    Always want to go long at resistance among the indexes and monitoring the components of the indexes to see if they are in agreement. Notes: none

    Fade Short thoughts: Depending on strength would consider a short fade at yesterdays highs or highs of the channel.  Minimum 30 minute wait. May consider a lunchtime fade short if at resistance. Always want to short with the indexes at resistance and monitoring the components of the indexes to see if they are in agreement.



    * 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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