Tuesday, December 3, 2013

Pre market thoughts Wednesday

             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
  • 1792.25
  • 1787.50
  • 1783.50
  • 1779.50
  • 1774.50

Day Trading Pre Market Thoughts  

Trend Thoughts: Trend is long with the continued pullback. Will be careful chasing longs up here and staying with the theme fading off support NQ has some downside open space between support levels. ES has closed under the 10SMA, and a close under the 10sma tomorrow will consider a trend change. NQ still over the 10sma showing gradual pullback. Don't jump on the short bandwagon yet. 

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

True Range Thoughts ES:  Range is picking up, many reports tomorrow. Looking 10-16, alot depends on the open. 

Reports: 8:15 non farm 8:30 Trade Balance   10:00 ISM Manufacturing report and new home sales

Special Day Thoughts, Trading Day of the Month: 3rd day of the month, with monthly inflows usually bullish. 

Gap Fill Thoughts:   Up Gap: If under Mondays low on ES (1797) will consider, S1 for the NQ   Down Gap: If price is above Tuesday 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. 

Gap and Go Thoughts: Up Gap: Solid up gap over yesterdays high with support may consider going long at the open. Down Gap:
After 3 down days and a lot of support underneath will pass at the open for a gap and go short. 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. May consider 15 minute fade on a gap down. 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, may consider shorting pullbacks on light volume provided the bounce is not coming off support with strong volume. Indexes must be working together Notes: Careful shorting with the market trend up

Fading Short
thoughts:
Will not fade a gap up that holds its gap.
May consider fading 1800 area if all 3 indexes at resistance and the ES has had a range of at least 10 points. Moderate down gap would consider at gap fill area on lighter volume and the 3 indexes at resistance.

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