Saturday, November 23, 2013

Pre Market Thoughts Monday and Weekly Charts ES and NQ

         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:
  • 1794
  • 1789
  • 1780.25
  • 1771.75
  • 1769
Day Trading Pre Market Thoughts
Trend Thoughts: Trend stays long and unless there is a nasty down gap below the  low of Friday. Will  not consider a trend change until a solid close below the low of last Wednesday. This week ended much the same as last week. The weekly chart on the ES still points to 1830 area at some point. Maybe year end? 

Thanks for the positive feedback on my trading plan, always feels good to know it was of value to ones trading experience. I had a few suggestion's from readers for the Blog to add my sector strength and range thoughts.

S&P 500 Sectors: Strong Sectors: XLF and XLV    Lagging Sectors: XLU and XLK

Range Thoughts ES: A modest up or down gap 10-12 point range ...nasty bearish morning and below fridays low and could get extended range on the day 15-20 points

Reports: 10:00 AM pending home sales

Special Day Thoughts, Trading Day of the Month: Day 17


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 Fridays lows will consider the long at the open is sitting at 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 may consider going long, will not chase an up gap. Down Gap: Will consider shorting with a large gap down under the lows of Friday. 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 will not chase a gap above the highs of Friday.  May consider a BO or pullbacks with a flat or modest down gap with Fridays highs or 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 extremely bearish for 30 minutes after a gap up. 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: The indexes gap up I may consider a fade near R1/R2 pivot or trading into these areas after 60 minutes. Otherwise will not fade short with the trend up. I want the 3 indexes in agreement. 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.

1 comment:

Al said...

look forward to your posts.. thanks

Disclaimer

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