Wednesday, December 11, 2013

Pre Market Thoughts Thursday




ES & 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:

  • 1795.50
  • 1796
  • 1792
  • 1787.5
  • 1779.25
  • 1774.25
  • 1770.25

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 for both Long and short term. Could see a bounce up but will start to look for more shorts at resistance. Short term its bearish but still in a nuetral to semi-bullish longer trend. This market will not head straight down but today could of been a signal of what may come. 

S&P 500 Sectors: Stronger Sectors: XLP    Lagging Sectors: XLU  XLE Notes:

 
True Range Thoughts ES:  At least half of today's 25 point range, 12-15 points

Reports: 8:30 Retail Sales and Unemployment Claims

Special Day Thoughts, Trading Day of the Month:
9th trading day of the month, tends to be a stronger day with mid month in flows starting. December ES is usually the best trading  month for longs. Thursday tends to be a bounce back day. * info taken from Stock Market Almanac, provided more for fun than for a day trading bias
 
Gap Fill Thoughts:  Up Gap: after a day like today bears could look to cash in on a gap up. If below the PP pivot I may consider for a gap fill if at resistance only Down Gap: If price is above the S1 pivot  will consider the long at the open. Will be checking premarket for support. Notes: Gap fill could be tricky today after the large move yesterday. Reduce contracts or pass is an option.

Flat Open:  May consider long if flat with yesterdays lows as support. Pre market action will be key.
 
Gap and Go Thoughts: Up Gap: If the Index's gap up with support I may consider running with the index long at the open. Down Gap: After today's run will pass, unless sitting under yesterdays lows and considered strong resistance  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: Would need all three index's in agreement to attempt a BO. If there is some strength will consider BO's and pullbacks long 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

Fading Long thoughts: May target yesterdays low or near the S1 or S2 pivot. 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 consider pullbacks and a BD 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 below yesterdays low, 20sma and with room to run to a support level. Will not look for breakdown's if the markets come off support with volume. Notes: none

Fading Short
thoughts:
Will only consider the PP if all 3 indexes at resistance and the gap has filled. 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