Wednesday, December 18, 2013

Pre Market Thoughts Thursday

ES Five 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 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 Levels and Trend Lines I will be paying attention to when considering a trade: Does not include overnight highs and lows.

  • 1806
  • 1800
  • 1791.50
  • 1783
  • 1765.50
  • 1754

Day Trading Pre Market Thoughts  

Trend Thoughts: Short term is bullish with the continued longer term bullish trend. Will look to get long on an intra day pullback. I suspect new highs are in order by Xmas?

S&P 500 Sectors: Strong Sectors: XLI    Lagging Sectors: XLU  Notes:

True Range Thoughts ES:  After explosive move/ range could give way to a 15-18 point day.

Reports: UE claims 8:30, Existing Home Sales and Philly Fed 10:00

Special Day Thoughts, Trading Day of the Month:
13th trading day of the month shows no historic advantage. December ES is usually the best trading  month for longs. * info taken from Stock Market Almanac, provided more for fun than for a day trading bias

Gap Fill Thoughts: Up Gap: If overnight high is near 1811.5 may consider the fade  Down Gap: Will consider fading a down gap near 1800 or 1790.5. Notes: If sitting at support or resistance check pre-market to see if price is considered support or Resistance.

Flat Open Thoughts:  Pass 

Gap and Go Thoughts:
Up Gap: Already stretched will pass. Down Gap: Will pass after strong end of day finish. 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 on a down gap coming strong off support with room to Wednesday High  Notes:

Fading Long thoughts:
Will target 1806, 1800, 1790.50, 1769.25 as possible areas to fade long at there first test. Any intraday retest will pass. Prefer a a 5 point plus move into the area. 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:  I will pass on shorting breakdowns after bullish run Notes:  near support on the daily and could bounce and trigger short squeeze. 

Fading Short
thoughts:
After the run today would consider a fade short at
1806, 1811, 1820 with a minimum 5 point run after a first test. 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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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