Saturday, November 30, 2013

Market Thoughts for Monday and Weekly Charts


ES and NQ Weekly Chart

ES and NQ Five Day 30 minute charts

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 down. Preparing the night before takes out all the emotion of possibly considering a trade when the markets open. 

White Lines show the ES Price Level areas I will be paying attention to when considering a trade:

  • 1807
  • 1801.25
  • 1798.5
  • 1792.25
  • 1788.50

Day Trading Pre Market Thoughts  

Trend Thoughts: Trend is long after a low volume holiday week. A lot of reports come out next week and a lot of this upside built on low volume.  Will be careful chasing longs up here and staying with the theme fading off support. If there is weakness the NQ (which is acting the strongest) doesn't have much support and may drop the quickest. Any weakness is still considered a pullback. Will  not consider a trend change until a 2 day close below the 10sma.
Weekly Charts still have ES heading toward to top of its channel at 1830ish by year end? ES has a NR7 weekly bar and expect a much wider range this week.

S&P 500 Sectors: Strong Sectors: XLK    Lagging Sectors: XLU and XLE Notes:

True Range Thoughts ES:  Up gap that holds 10-12 points:  Down Gap below Mondays highs: 12-16 points 

Reports: 8:30 Bernake Speaks   10:00 ISM Manufacturing report

Special Day Thoughts, Trading Day of the Month: First day of the month. I don’t short the first 30 minutes.  Will only short if bearish is just screaming at me.

Gap Fill Thoughts:   Up Gap: I don’t short up gaps the first day of the month.   Down Gap: If price is above last Weeks lows will consider the long at the open if sitting at support. Notes: If sitting at support/resistance check pre-market to see if price is considered support or Resistance. 

Flat Open: Will consider going long with Gap fill or Low of day as support. 

Gap and Go Thoughts: Up Gap: Solid up gap over the R1 pivot with support may consider going long at the open. Down Gap: Only if under last week’s low, then may consider a fade off resistance. With trend up and a Monday after a slow week could be extremely unpredictable with any sizable gap down. Better to pass and let the first 30 minutes play out.   Notes: none

Thoughts on Long or Short Setups after 30 Minutes of Trading

(Always evaluate market after 30 minutes unless noted)

LONGS

Breakout thoughts for a 15, 30 or 60 minute breakout: Will consider BO's or pullbacks with a gap up that holds its gap or gap down and a strong bounce off support.  Notes:

Fading Long thoughts: In staying with the trend looking for fades off support (false breakdowns) near the price points stated above. Minimum 30 minute wait. As always don't fade run away trains if bearish early, let the run play out. 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:

SHORTS

Breakdown thoughts for a 15, 30 or 60 minute breakdown:  Will not consider any breakdowns unless extremely bearish for 30 minutes below last weeks low with volume. Extremely bearish is breaking support levels with a long red 30 minute nasty down bar with volume. If that scenario unfolds then I may consider shorting pullbacks on light volume provided the bounce is not coming off support with strong volume. Indexes must be working together Notes: Best not short with the market trend up

Fading Short
thoughts:
First trading day of the month will not fade short unless extremely bearish after 30 minutes and below last weeks lows. Will not fade a bounce off support with strong volume. Always want to short with the indexes at resistance and monitoring the components of the indexes to see if they are in agreement. Notes: Always mark Support/Resistance and confluence zones that could be used for targets, fading and breakout/breakdowns.

Always mark Support/Resistance and confluence zones that could be used for targets, fading and breakout/breakdowns.



* 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