Thursday, November 21, 2013

Pre Market Thoughts Friday

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:
  • 1798
  • 1792.25
  • 1789
  • 1782
Day Trading Pre Market Thoughts
Trend Thoughts: Trend and bias is still long with a nice bounce back day. Seems to be more short covering than anything else after the gradual pullback and todays below average volume.  Could see more short covering tomorrow to push higher. 

Trading Day of the Month: Day 16

 Reports: none

Special Day or Thoughts: Now have a gap to fill below after todays gap up and go.

Gap Fill Thoughts:   Up Gap: If price is below the R1 Pivot and considered resistance will consider the short.  Down Gap: If price is above 1788  will consider the long at the open off support. Notes: If sitting at support/resistance check pre-market to see if price is considered support or Resistance. 

Gap and Go Thoughts: Up Gap: A flat to moderate open that pulls into gap fill area I  may consider going long, will not chase an up gap. Down Gap: Will consider shorting with a large gap down under S1 pivot. Will keep an eye on support below and pass if support is in the way of an exit goal. I want the indexes in agreement or will pass.  Notes: none

Thoughts on Long or Short Setups after the first 30 Minutes of Trading
(Always evaluate market after 30 minutes unless noted)
LONGS
Breakout thoughts for a 15, 30 or 60 minute breakout: I see the 1800 level area as resistance and will not chase a gap above the Thursday highs.  May consider a BO or pullbacks with a flat or modest up or down gap with R1 pivot as a target. Will consider Bo's or pullbacks with a large down gap that has traded bullish 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 a huge gap down under the R1 pivot and after 30 minutes has the indexes trading below the lows of yesterday. Highly unlikely but must prepare. 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: The indexes gap up I may consider a fade near 1800 or beyond at the R2 area provided the other indexes and components of the index at resistance and supporting the trade. . Otherwise will not fade short with the trend up. Always want to short with the indexes at resistance and monitoring the components of the indexes to see if they are in agreement. Notes: none 


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